The federal government’s recently announced extension to temporarily allow the electronic execution of legal documents – including the deed for an SMSF trust – which ended this month, has now been paused, an SMSF technical expert has warned.
In an update on the Smarter SMSF website, company chief executive Aaron Dunn highlighted a delay to the six-month extension of temporary COVID-19 relief measures allowing SMSF corporate trustees to sign and execute deeds electronically.
The extension, announced in February by Treasurer Josh Frydenberg, was expected to provide continued relief relating to the signing and sending of electronic documents and remote witnessing until 15 September, however, the finalisation of the bill allowing the extension hasd been delayed, Dunn explained.
“The [proposed] extension intended to grant relief through to 15 September 2021, providing the government with the necessary time to make these changes permanent,” he noted.
“To effect this extension of time, Treasury Laws Amendment (2021 Measures No 1) Bill was introduced into parliament. However, due to some proposed amendments within the Senate, this bill remains unfinalised. As a result, the current temporary measures to section 127 of the Corporations Act have now lapsed.
“According to the sitting calendar, the Senate will not sit to finalise this bill until the week commencing 10 May 2021.”
The temporary relief measures allowing the execution of deeds electronically were first introduced in May 2020 during the height of the COVID-19 pandemic and soon after extended by a further six months to 21 March.
Despite the latest extension being temporarily halted, Dunn pointed out a recent amendment to the Corporations Act 2001, as well as amendments to state legislation in Victoria and Queensland, could potentially allow for the continued validity of electronic signatures.
“There was an amendment late last year to the definition of ‘document’ in the Corporations Act 2001 that extends to include a document in electronic form, arguably making it easier for the use of electronic signing,” he said.
“[In Victoria], legislation has recently passed that permanently introduces provisions for deeds to be electronic, allows for split execution and allows for remote witnessing (subject to various requirements).
“[In Queensland], a proposed amendment has been introduced into parliament to extend the current relief through to 30 September 2021.”
Last month, Dunn emphasised the need to guard against the potential for lax approval procedures creeping into the running of an SMSF resulting from innovative technology measures brought about by the COVID-19 pandemic, such as the use of digital signatures.
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