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.

1. Order SMSF related document packages

• Set up an SMSF
• Update an SMSF deed
• Set up an SMSF pension
• Arrange SMSF borrowing lending docs:
  • for when the lender is a bank
  • for when the lender is a related party
• Set up an SMSF corporate trustee
• SMSF Death Benefit Nomination - binding or non binding
• SMSF Death Benefit Agreement - binding and permanent

2. Download

Download a checklist of the information you need to order a document package.