SMSFs are not a suitable vehicle to facilitate the First Home Super Savers Scheme due to the nature of the structures and the flow-on effects that may result from the strategy, a specialist superannuation lawyer has said.
“Odds are the self-managed super fund in question will, in an economic sense, be that of the parents. Who’s going to be joining it? Presumably adult kids and statistically [there is a good chance] those kids might get divorced,” DBA Lawyers special counsel Bryce Figot told attendees at his firm’s recent strategy seminar in Sydney.
“That’s a real risk and you could not rule that out.”
Figot said if an SMSF was originally set up by parents and then allowed adult children to become members and these children subsequently got divorced, it would expose the super fund to the divorce proceedings.
“Their ex-spouses would then have the ability to riffle through the SMSF and no one wants that,” he said.
“So it appears SMSFs can be used in that scheme, [but] should SMSFs be used in that scheme? No way.”
He said he did not think the First Home Super Savers Scheme would prove a successful initiative overall.
“A couple of years’ ago the government introduced something very similar [First Home Savers Accounts] and what happened to that? It died due to lack of popularity,” he said.
“So I think it’s going to die.”