STRATEGY
A radical SMSF approach – part three In the third part of this series, Grant Abbott continues exploring the possibility of a multiple-member SMSF with a single trustee structure.
GRANT ABBOTT is founder of LightYear Docs.
In the first two instalments of this series on a new radical way of running an SMSF, I acknowledged some common reasons why SMSF members would be reluctant to act as trustees of the fund. These included nervousness around the ability to be sued and the mental capacity of older individuals. As I have alluded to there is a solution at hand and it begins with a statement that will change many people’s deep-seated beliefs on what is required to have a compliant SMSF: not all trustees must be members of an SMSF and also not all members must be a trustee of an SMSF. My authority for this statement is section 17A(3) of the Superannuation Industry (Supervision) (SIS) Act 1993 and also numerous ATO guidelines. And let’s face it, who am I, or for that matter any lawyer, compliance officer, accountant, planner or auditor, to argue against it?
The law Section 17A provides a definition of what an SMSF is and provides in subsection (1) that all members must be trustees and all trustees must be members. So, no joy there to back up the argument. In fact, it is exactly the opposite. But section 17A(3) provides as follows: (3) A superannuation fund does not fail to satisfy the conditions specified in subsection (1) or (2) [that basically require a member to be a trustee or director of a corporate trustee] by reason only that: (a) a member of the fund has died and the legal personal representative of the member is a trustee of the fund or a director of a body corporate that is the trustee of the fund, in place of the member, during the period: Continued on next page
QUARTER II 2021 39
