SMSF Trustees may be remunerated in some circumstances
A proposed new law would allow SMSF trustees and directors of SMSF corporate trustees to be remunerated for non-trustee duties or services.
Overview
The proposed new law would introduce a new section 17B of the SIS Act so that trustees and directors of corporate trustees could be remunerated for non-trustee duties or services.
The existing prohibition on SMSF trustees receiving remuneration is set out in sections 17A(1) and 17A(2). If the change is made, then the prohibition would not apply to remuneration for any duties or services performed by a trustee of an SMSF, or a director of an SMSF's company trustee if each of the following is the case:
- the trustee, or directors of the corporate trustee, performs the duties other than in the capacity of trustee;
- the trustee, or directors of the corporate trustee, is appropriately qualified and licensed to perform the duties or services;
- the duties or services are performed as part of a business through which the trustee or director provides the same services to the public; and
- the remuneration is on an arm's length basis.
Timing
On the basis the Bill is passed, the new section 17B will apply to individual trustees from 8 October 1999, and from the 2007-2008 income year for directors of a corporate trustee.
The change is in the Tax Laws Amendment (2011 Measures No 9) Bill 2011 (Bill) which makes retrospective changes to the Superannuation Industry (Supervision) Act 1993 (SIS Act). The Bill was introduced into the House of Representatives on 23 November 2011 and is due for debate in the next parliamentary term, commencing in February.
More information from Maddocks
For questions or more information about the above alert, please call Maddocks in Melbourne (03) 9288 055) and ask for a member of the Financial Services Team.
More Cleardocs information on superannuation and SMSFs
You can read other articles concerning superannuation and SMSFs here.
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- Set up an SMSF corporate trustee
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Chris Beeny
Partner
Phone: 03 9288 0555
Chris is a Partner in the Maddocks Commercial group. His principal areas of practice are superannuation, trusts, taxation, general corporate advice, company secretarial law and the law of charities and non-profit organisations. He also has extensive experience in private client work — wills and estates.
A special focus for Chris has been superannuation, where Chris has been involved in related tax, trust, Corporations Act and regulatory advice for more than 17 years and is recognised as one of Australia's leading legal practitioners.
Chris's professional memberships include:
- Member of the Commercial Law Section of the Law Council of Australia
- Member of the Superannuation Committee of the Law Council of Australia
- Founding member and current Chairperson, Superannuation Committee of the Law Institute of Victoria
- Member, International Pension and Employee Benefits Law Association
- Fellow, Taxation Institute of Australia
- Member Association of Superannuation Funds of Australia
- Member Australian Institute of Superannuation Fund Trustees.
As well as writing numerous articles and speaking at many conferences, Chris is a joint author of "Superannuation: A Practical Approach" (Leo Cussen Institute), a contributor on superannuation topics to "The Employment Factbook" (Centre for Professional Development) and a member of the Editorial Panel of "Australian Superannuation Law Bulletin" (Prospect Media).
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