STRATEGY
A big yawn or brave new world?
Enthusiasm regarding the ability to have six members in an SMSF has somewhat waned. Peter Townsend lays out the opportunities and problems of running a fund using the new maximum member limit.
PETER TOWNSEND is principal of Townsend Business and Corporate Lawyers.
One of the many changes wrought by the COVID-19 pandemic has been the delay in the introduction of the six-member SMSF. The question is: does anybody care? For such a seemingly radical change the reform has provoked little interest. It was a surprise when it was first mooted by the federal government and remains somewhat of a curiosity. It may come into law in the next session of parliament, but don’t expect to see any placard wavers out front on the day. When she announced the reform in April 2018, then-revenue and financial services minister Kelly O’Dwyer said the change from a maximum four members in an SMSF to a maximum six would allow for greater flexibility. O’Dwyer didn’t mention exactly
why that would be so. Similarly, she did not explain why six was the magic number. If six provided so much extra benefit, imagine what 10 might achieve. The explanatory memorandum for the bill was also suitably enthusiastic: “Increasing the allowable size of these funds increases choice and flexibility for members. SMSFs are often used by families as a vehicle for controlling their own superannuation savings and investment strategies ... This change will help large families to include all their family members in their SMSF.” Some of these statements are debatable, but even if accepted, don’t point to any significant Continued on next page
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