STRATEGY
A business owner boost
The legislation increasing the maximum number of members an SMSF can service came into effect this year, having originally been announced as a budget measure before the last federal election. Per Amundsen illustrates the difference this change in superannuation law can make for some people who own their own business.
PER AMUNDSEN is head of research at Thinktank.
66 selfmanagedsuper
The federal government’s decision to increase the maximum number of members allowable in an SMSF from four to six from 1 July 2021 has been long awaited by a small number of SMSFs. To date, most of the focus has been on expanding family SMSFs. But this reform has opened up possibilities for small businesses and partnerships. The following case study demonstrates how individuals involved with these types of commercial enterprises can benefit from this change in legislation. Bill and John have been running a successful plumbing business for more than two decades. As life-long friends, it’s been a handshake agreement based on mutual trust. But with Bill’s son, Simon,
having completed his apprenticeship and joining the business and John’s daughter, Sarah, wanting to go down the same career path on leaving school, they realise it’s time to formalise their verbal agreement. In particular, they agree running the business from the back of their utes and on their kitchen tables must end, and a more formal structure implemented, especially as Simon and Sarah will have equity in the business. They will also need business premises and that requires capital. Both have their own SMSFs and an understanding they can use their funds to acquire property that can then be leased back to the business. But neither wants all their super savings in one asset, so they will
