Last week, the government introduced a bill into Parliament to give effect to the measure to increase the maximum number of members allowed in an SMSF to six.
SuperConcepts general manager of technical services and education Peter Burgess said that even though the bill has now been introduced into Parliament, it’s still not clear whether this bill will be passed by the time the election is called.
“It’s not the type of measure that the Labor Party will support but the minor parties might, particularly if the minor parties don’t agree with Labor’s franking credit proposal,” Mr Burgess told delegates at the SMSF Association Conference.
“It’s been pointed out, of course, that if… allow extra accumulation members into the fund, the fund should have less excess franking credits and therefore is less likely to be impacted by Labor’s proposal to do away with excess franking credits, so we don’t know exactly when this is going to be introduced or passed.”
Mr Burgess said that the bill has now been referred to a Senate Economic Committee and that the committee is due to report back to Parliament on 26 March.
“So it seems the government will have one last crack at getting this bill through when both houses sit again in the first week of April,” he said.
“Now given that the government has introduced this bill into Parliament, it suggests that they’re feeling pretty confident that they can get this bill passed before the election is called, so there is still the possibility that we may see six-member funds introduced.”
If the measure is passed and SMSFs can start to have six members, Mr Burgess said that SMSF practitioners and their clients will need to be very careful about where the balance of power lies.
“There’s an increased likelihood of the adult children in the fund outnumbering the parents of the fund, and without careful planning, that can give rise to some unintentional outcomes for SMSFs.”
