Definitions

11

A SMSF meets the definition of a SMSF of the SISA[12] if:

  1. it has fewer than five members;;
  2. each individual trustee or director of the corporate trustee is a member of the fund, unless it is a single member fund, in which case the sole member is either:
    1. a director of the corporate trustee or one of two directors who are related or, if unrelated, the member is not an employee of the other director; or
    2. one of two individual trustees who are related or, if unrelated, the member is not an employee of the other trustee;
  3. each member of the fund is a trustee or a director of the corporate trustee;
  4. no member is an employee of another member, unless they are relatives; and
  5. no trustee, or director of a corporate trustee, receives remuneration for any duties or services performed by a trustee or director in relation to the fund, other than where there is an exception and the trustee has the skills to perform the service.[13]

12

A SMSF does not fail to satisfy the definition of a SMSF of the SISA[14] if:

  1. 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:
    1. beginning when the member of the fund died; and
    2. ending when death benefits commence to be payable in respect of the member of the fund; or
  2. the legal personal representative of a member of the fund 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 any period when:
    1. the member of the fund is under a legal disability; or
    2. the legal personal representative has an enduring power of attorney[15] in respect of the member of the fund; or
  3. if a member of the fund is under a legal disability because of age and does not have a legal personal representative - the parent or guardian of the member is a trustee of the fund in place of the member; or
  4. an appointment under section 134 of an acting trustee of the fund is in force.

13

An approved SMSF auditor[16] is a person who is registered as an approved SMSF auditor with ASIC[17] but does not include:

  1. a person for whom an order disqualifying or suspending the registration of that person from being an approved SMSF auditor is in force; or
  2. a person who is disqualified from being or acting as an auditor of any superannuation entity.

12

See subsections 17A(1) & (2) of the SISA.

13

Section 17B of the SISA allows for exceptions in relation to remuneration of trustees.

14

See subsections 17A (3) & (4) of the SISA.

15

The applicability of enduring powers of attorney in this circumstance will vary depending on the relevant state legislation. Guidance is also provided in Self Managed Superannuation Funds ATO Ruling SMSFR 2010/2.

16

See subsection 10(1) of the SISA.

17

See SISA section 128B and ASIC Regulatory Guide 243 Registration of self-managed superannuation fund auditors provides guidance on how to apply for registration as an approved SMSF auditor.