Treasury still bullish on six-member fund measure
While draft legislation is yet to be released for the proposal to increase the number of SMSF members to six, recent feedback from Treasury suggests the measure is still set to go ahead, according to a technical expert.
SuperConcepts general manager of technical services & education Peter Burgess said while the government still hasn’t released any legislation for the proposal to increase the number of members in an SMSF, Treasury are still confident the measure will be passed as law. The proposed start date for the measure is 1 July 2019.
“Treasury are feeling pretty good about this measure. They’ve had some positive feedback from the community so I think it’s inevitable that we will see this change go through,” Mr Burgess told delegates at the Chartered Accountants Australia and New Zealand National SMSF conference.
While some clients may benefit from having more members in their SMSF, Mr Burgess also noted that there are clearly some risks associated with this measure.
“Aside from the additional admin, and operational complexity involved with having more members in your fund, in my view, there are also some investment risks here,” he said.
“I’ve been having conversations with clients recently who are very excited about this proposal. What they want to do is set up an SMSF, pool their savings together and go out and get a residential property, and that property will be their retirement fund. Aside from the obvious diversification issues, there is also some succession planning issues there.”
“So while I think this measure is well intended, I can see some risks in allowing a larger group of individuals to pull their superannuation savings together and benefit from the investment concessions that are afforded to SMSFs.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.