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Increase in SMSF member numbers passes

Increase in SMSF member numbers passes

Legislation increasing the maximum number of allowable members in new and existing self-managed superannuation funds and small APRA funds from 4 to 6 members has passed both Houses of Parliament without amendment and awaits Royal Assent.

The changes are expected to commence from 1 July 2021, provided Royal Assent is received by 30 June 2021.

Greater flexibility for families

The increase in permitted member numbers to six is a welcome change that will provide more opportunities for families to pool wealth in a common super fund structure for investment. Families participating jointly in this way may open up investment opportunities that would not otherwise be available, such as the ability to acquire a strategic property asset for example.

We expect families may also see advantages in including children to jointly manage family wealth in a formal investment structure where consensus decisions are required which must be documented, accelerating financial and legal acumen. It may also make it easier for families to maintain specific assets/investments in the family super fund, such as a business property and transition those assets/investments to the next generation.

A decision to include children in a family super fund may not always be the best approach. It is important to remember all fund members have an equal say in investment and other fund management decisions, irrespective of the size of their super balance.  We have also seen examples where members may want to pursue different investment strategies as they are at different stages of life, which may be better pursued in a separate super fund.


The amendments increase the number of members referred to in the definition of a self-managed superannuation fund from ‘fewer than 5 members’ to ‘no more than 6 members’.

The amendments also update sign-off requirements for annual accounts and statements.  Under updated sign-off requirements, funds with one or two directors or individual trustees must have accounts and statements signed by all of those directors or trustees.  For funds with between three and six directors or individual trustees, the accounts and statements must be signed by at least half of the directors or individual trustees.


Children under the age of 18 can become members of a family super fund, however they cannot act as a director or a trustee.  For children, generally the parent or guardian of the minor acts as director/trustee in place of the child.

In terms of contributions for minors, after tax contributions (non-concessional contributions) within contribution caps are permitted regardless of age. Tax deductible contributions are generally not possible unless the child qualifies as an ‘employee’ under Superannuation Guarantee legislation, or the child is carrying on activities that amount to the carrying on of a business (s.290-165 ITAA97).

Trust Deed

If you are considering admitting additional members, you will need to review the fund’s trust deed and possibly update before proceeding.  Some fund trust deeds may be prescriptive in terms of the number of permitted fund members.

State Trustee Acts

State based Trustee Acts will also need to be considered.  In Victoria, NSW, QLD, WA and ACT, the number of individual trustees is limited to a maximum of four. This limitation can be overcome by using a company trustee for the fund, which is the preferred trustee structure in any event.

Next steps

The impacts of including additional members in a family super fund should be carefully considered before implementing, particularly in terms of fund control and suitability of investments.


This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional advisor. To the maximum extent permitted by law, neither Pitcher Partners or its affiliated entities, nor any of our employees will be liable for any loss, damage, liability or claim whatsoever suffered or incurred arising directly or indirectly out of the use or reliance on the material contained in this content. Pitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Liability limited by a scheme approved under professional standards legislation.

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