STRATEGY
A radical SMSF approach – part two
Grant Abbott continues to examine the possibility of having a multiplemember SMSF with a single trustee structure in the second part of this series.
GRANT ABBOTT is a director of I Love SMSF.
In the first part of my three-part series on a new radical way of running an SMSF I looked at the responsibilities of being a trustee. My argument is that, as advisers, we have been cavalier in setting up SMSFs where all members are trustees or directors of a corporate trustee. For many members, well advanced in age or lacking moderate financial and management skills, the role of trustee is an extremely high competency bar to attain. After all, consider your existing SMSF clients – how would they go sitting a basic SMSF trustee test? The main focus in the first part was on the financial perils of being a trustee and to that end we looked at section 166(1) of the Superannuation
Industry (Supervision) (SIS) Act 1993 and also the commissioner of taxation’s statement on the impact of the section: Practice Statement Law Administration (PSLA) 2020/3 – Self-managed superannuation funds – administrative penalties imposed under subsection 166(1) of the SIS Act. In PSLA 2020/3, the tax commissioner noted that, quite apart from set administrative fines, that he could also use the following: • issuing a direction to educate, • accepting an enforceable undertaking, • issuing a direction to rectify, • disqualifying an individual and prohibiting them Continued on next page
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