POWERED BY MOMENTUM MEDIA
Accountants call for family extension on SMSFs
Accountancy firm Chan & Naylor has called for an extension to the four-member limit on self-managed super funds (SMSFs), which it says disadvantages families with more than four members.
“The retirement savings of everyday Australians are being held back by this inflexible approach,” said Chan & Naylor chief executive Sal Carrero.
“The Government should be encouraging the expansion of the SMSF sector at a time when people are questioning the adequacy of their retirement savings,” he said.
With the hit to superannuation savings by the global financial crisis, many Australians now prefer to have more control over their investments through a SMSF, which allow them to invest in assets they feel more comfortable with, such as residential real estate.
Chan & Naylor director Ken Raiss said the current rules limiting SMSFs to four members were arbitrary, unjustified and penalised large families.
A solution would be to allow more members into a SMSF, provided they were part of a nuclear family unit and met the definition of 'spouse' or 'children'. The term 'spouse' was already legally applied to same sex and de facto couples, so no families would be penalised by the expanded definition, he said.
Some Chan & Naylor clients had been forced to start up two separate SMSFs to accommodate all family members, unduly adding to the cost burden and decreasing efficiency, he said.
Rather than increasing the limit to another arbitrary number such as six or eight, the family member definition would ensure that no family was penalised for having too many children, while not including extended family members such as aunts and uncles also ensured the number would not become too large.
“[Changing the definition] would cost the Government nothing, reduce the costs for compliance for larger families [and provide] greater flexibility, greater efficiency and economies of scale,” Raiss said.
AUTHOR
Mike Taylor
Recommended for you
The impact of identity theft and its threat to superannuation savings were highlighted in a case that went before the Federal Court at the end of 2023.
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
74.26 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
72.60 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
44.46 3 y p.a(%)
4
Pengana High Conviction Equities B
39.12 3 y p.a(%)
5
Pengana High Conviction Equities A
39.05 3 y p.a(%)
