Hi Jorgon; After sifting through a lot of material about this I did come across an ATO meeting that addressed this issue and strictly speaking you are correct that you need a legal representative to act as trustee. Having said that I came across this on the cleardocs website Can I have a corporate trustee and a member who is not 18 years of age? The law does not allow an under 18 member for a SMSF with a corporate trustee. This is because the Superannuation Industry (Supervision) Act 1993 (SIS Act) requires: 1.Each director of the corporate trustee to also be a member of the SMSF; and 2.The Corporations Act 2001 requires a company director to be at least 18. However, according to the SIS Act, if a member of a fund is under 18 and does not have a legal personal representative, then the minor may be a member provided that the parent or guardian of the minor is a trustee of the fund in place of the minor Read more: http://www.cleardocs.com/resources-legal-faq-smsf.html#4#ixzz1egwc0Jbh
SMSF's with individual trustees may also draw lumpsums out of their super after retirement. not sure about the 15% pension rebate thingie ... what exactly do you mean??
Hi nonrecourse I'm afraid that the words you have quoted whilst strictly true, present a misleading picture. In so far as they imply in the ordinary case that the SIS Act permits a child under the age of 18 to be a member of a fund where there is a corporate trustee, this is incorrect for the reasons given in my post.
Hi Jorgon; I'm not disagreeing with you I have seen the minutes of the ATO SMSF sub group meeting back in 2010. We were one of the ones who did this (added our two sons to our SMSF,the younger one was only 16). Both we and the ATO were unaware at that stage there was a problem. I made minutes to say I as a director of our corporate Trustee was acting as guardian. The auditor failed to flag this and when the ATO checked the ASIC register this triggered a desk audit. At the time our then accountants were hopeless so I dealt directly with the ATO supplied the minutes showing I was acting as guardian and the ATO then passed it. Why did I want my Children in our super at that age? The co-contribution if you contributed $1000 was $1500. Do that from age 16 to 24 with a 5% return over 49 years adds another $80,000 to their super. Of course our hard Labour government has since reduced the $1500 to $1000 and also knocked off the indexed increases. I love it when labour voters tell me that they look after the working class.
This will soon be allowed. As mentioned previously this was an anomaly in the legislation, and it will soon be amended by the Tax Laws Amendment 2011 (Measures No.9) Bill 2011 which is currently before the Federal Parliament. This will permit a parent or guardian to be a director of a corporate trustee in place of a minor child [an amendment will be made to section 17A(3)(c) of the Superannuation Industry Supervision Act 1993]. It is intended that this amendment will have retrospective effect.
Thanks for the update jorgon. Common sense isn't very common but in this case it prevailed. Kind Regards non recourse
If you have an SMSF and you have a corporate trustee and you also have one or two children there is some limited advantage in adding them to your fund before the 30th of June. This is the last year that the co-contribution will match a $1000 contribution because the hard Labour mob have knocked that nice little earner out for anyone earning between $31,400 and about $61,000 on a sliding scale. After the 2011/2012 financial year the co-contribution drops down to $250. Kind Regards non recourse
