A bill to increase the maximum number of members that a SMSF (or small APRA fund) can have from 4 to 6 has been introduced to Parliament this month.
As it stands now, the proposal is that the law would begin from the first day of the quarter after it receives royal assent, thus enabling SMSFs to have up to 6 members from that date.
Now, just to throw some traps into the mix, SMSF trustees need to be aware that some State and Territory laws restrict the number of trustees a trust can have to LESS than 6. Given that a SMSF is a type of trust, SMSF trustees would need to check State or Territory law if they are considering increasing the number of individual trustees of the fund to more than 4.
The alternative of course is to have a Corporate Trustee, which avoids the issue.
The ATO have stated that “if the law passes before the required system changes are implemented, an interim process for SMSFs wanting to have more than four members will be developed and communicated prior to the start date of the law.”
We will keep track of this and let members know when the law receives royal assent. The Senate referred the bill to committee, with a report due on the 4th November 2020.