Treasury Laws Amendment (Self-Managed Superannuation Funds) Bill 2020 was introduced into the Senate on 2 September 2020. This Bill will amend the SIS Act, the Corporations Act, ITAA 1997 and Superannuation (Unclaimed Money and Lost Members) Act 1999 to increase the maximum number of members in SMSFs from four to six members.
When will it come into effect?
The amendments will apply from the start of the first quarter that commences after the act receives royal assent.
How will this affect you?
The change inteds to increase choice and flexibility for SMSF members. For example, a mum and dad SMSF can add up to 4 of their adult children to their SMSF if they wish to do so, which will potentially increase estate planning and investment options to SMSF members.
This, of course, comes with increased risks. for example, more members means increasing the potential risks of disputes between members.
What will it change?
This will mainly have an impact on 2 sections in the SIS Act:
S17A(1)(a) – this paragraph will update the definition of a SMSF to have no more than 6 members
S35B(3)(a) and (b) – this paragraph will amend the number of required signatories on the financial statements
Other changes
The Explanatory Memorandum of the Bill also states that the definition of a small APRA fund will be updated in the Corp Act to accomodate the change and ensure the continued alignment of the legislation.
Trust deed updates – this is not legislated, however, new rules will require updated trust deeds if the trustees wish to use the new legislation
For more details, please read the Bill.