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Compliance & Regulation, Retirement

Six-member SMSF legislation dropped

The legislation enabling the maximum number of members in an SMSF to increase from four to six will not eventuate after the federal government dropped the measure from the Treasury Laws Amendment (2019 Measures No 1) Bill 2019 to ensure the bill’s passage through the upper house.

The measure was introduced in the 2018 budget and was regarded as a solution to some issues facing SMSF trustees.

Primarily the initiative meant couples with more than two children would no longer have to set up two or more SMSFs if they wanted a family super fund arrangement.

It was also seen as a potential countermeasure to Labor’s proposed changes to franking credit refunds as the increased member numbers would raise the likelihood of having accumulation accounts incurring tax liabilities in more SMSFs.

I Love SMSF chief executive Grant Abbott described the development as a golden opportunity that has now been missed.

“The excuse from the Liberal Party is that they pulled it out of the bill, which also had a craft beer excise they wanted to get through before the election,” Abbott said.

“I believe six-member funds are more important than the excise on eight litres of beer.

“Who would have ever thought the Liberal Party and the National Party would just let it flop?”

He labelled the original announcement a thought bubble and said there was no reason for the measure not to be legislated.

“For those of you who have actually seen the legislation it was one page long and you could have [tabled it] within a week of making the announcement. But they’ve left it so late it would appear they never wanted it to go through,” he said.

He said he did not think the proposal would be raised again.

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