A couple of changes in law will come into effect for SMSFs: from 1 July 2021 an SMSF can have up to 6 members and SuperStream Rollover V3 will be introduced in respect of SMSFs with all super funds needing to comply by October 2021. This article explains what this means for your SMSF.Melissa Ramov, Maddocks Lawyers
From 1 July 2021, SMSFs will be permitted to have up to 6 members. The idea behind this change is that it will allow greater flexibility in the joint management of retirement savings, particularly for larger families.
You should ensure that your SMSF trust deed allows your SMSF to have more than 4 members if you intend to add more members to your SMSF. The Cleardocs SMSF trust deed allows for this and the Cleardocs 'SMSF Minutes & Resolutions Package' can be purchased to add any additional members.
Although legally an SMSF can have more than 3 individual trustees, it is unwieldy and makes registration of assets in the name of the SMSF difficult (for example, brokers and ASXC companies will not allow more than 3 people to be listed as owners of shares).
For more information on the change you can read our earlier article here.
SuperStream is a standard which specifies minimum requirements for making and recording payments within the superannuation system. It currently applies to super contributions from employers when making contributions to their employee's nominated superfunds.
SuperStream will soon be extended to apply to rollovers and transfers of super into or out of an SMSF. From 31 March 2021, SuperStream Rollover v3 will require SMSFs to comply with the Superannuation Data and Payment Standards 2012 (the Standard) It will apply to rollovers and transfers of super requested on and after 31 March 2021.
These changes will impact SMSFs if members want to:
rollover funds to the SMSF, such as transferring money from any other super fund to the SMSF;
rollover funds from the SMSF, which includes when winding up the SMSF;
receive and action certain release authorities including first home super saver (FHSS); and scheme,
and requires the SMSF to:
electronically receive transfer/rollover requests;
validate the member's details;
when transferring money to the SMSF - use an electronic service upheld by the ATO to verify certain information; and
complete the rollover/transfer within 3 business days.
Therefore from 31 March, rollovers and transfers must all be completed electronically and information associated with the rollover and transfer must be sent to the member electronically in a standard format.
Any errors in complying with the above standard will not be regarded as a breach of trustee regulatory obligations if they occur before 1 October 2021.
Despite people's best intentions to get their affairs in order in time, jobs are often left to the last minute. Oftentimes the compliance issues around contributions caps relate to when the relevant contributions were made to the fund at year end. Efforts to meet the year end deadline of 30 June, can mean there is uncertainty about whether the deadline was met and when the SMSF received the contribution. If it is not clear (and not clarified), and in the next financial year the full contributions are also made, it can lead to major headaches if two years of contributions are deemed to have been made in the same financial year.
Electronic payment standards will determine when those contributions are made - it may in fact make it clearer when a SMSF received a contribution. However these kinds of matters should be attended to before the lead up to end of financial year.
For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of the Commercial team.
You can read earlier ClearLaw articles on a range of topics, such as:
Andrew is a Partner in the Maddocks Tax & Revenue team.
Andrew provides advice on:
His advice covers both direct and indirect tax considerations.
Prior to joining Maddocks, Andrew was a tax consultant at a Big 4 Chartered Accounting Firm.
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