A recent New South Wales Supreme Court decision has established a new course of action for SMSFs with a corporate trustee that has been deregistered.
The Re Inavas Pty Ltd case presented a scenario whereby an SMSF had a single asset, being a life insurance policy for a member taken out in 1987 that reached maturity in 2015.
A further complication arose as the SMSF trust deed could no longer be located, meaning a successor to the deregistered corporate trustee could not be appointed as the prodedure to do so could not be established.
As such, in accordance with corporations law, once the corporate trustee had been deregistered the assets of the fund had been automatically vested in the Commonwealth, with the Australian Securities and Investments Commission (ASIC) empowered to deal with the SMSF’s assets as an agent for the Commonwealth.
The proceeds of the insurance policy were then duly paid to ASIC once maturity had been reached.
The SMSF member who was the insured then applied to have the policy proceeds paid to him despite not having satisfied a condition of release.
Similar situations had previously seen the court deliver an order to reinstate the deregistered corporate trustee to deal with the asset in question.
However, in this case the SMSF member had just joined a public offer superannuation fund.
As a result, the court vested the proceeds of the policy in the trustee of the public offer fund the member was now a part of.
It was determined the trustee of the public offer fund could pay the policy proceeds to the member once a condition of release had been satisfied.
The court’s actions mean reinstatement of a deregistered corporate trustee is no longer necessary in some circumstances, which in turn means any fees owed to ASIC in acting as an agent for the Commonwealth from the time the corporate trustee had been deregistered to the time it was required to be reinstated need not be paid.