Self-managed superannuation funds (SMSF) & enduring power of attorneys (EPOA)

Posted on December 21st, 2016

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The following example from a draft tax ruling illustrates some of the issues in respect to Self-Managed Superannuation Funds (SMSF’s) and Enduring Power of Attorneys (EPOA).  If this prompts a query from you, give us a call:

EXAMPLE:  Clare is the sole member of a SMSF.  The SMSF trustee is Clear Pty Ltd and Clare is its sole director. The responsibilities of being director of the trustee company of the SMSF have become too difficult and time consuming for Clare. She executes an EPOA to her daughter, Jan, giving her authority to manage Clare’s superannuation affairs in accordance with State legislation.  Clare resigns as director of Clear Pty Ltd.  Jan is appointed in her place, as per the Corporations Act and the company’s constitution.  Other than the fact that Clare is not the director of Clear Pty Ltd as trustee for the SMSF, the fund satisfies the other requirements of the definition of an SMSF in subsection 17A(1) of the SIS Act.

Jan is a legal personal representative for Clare by virtue of holding an EPOA in respect of Clare. In addition, Jan is now director of the body corporate that is trustee of the SMSF in place of Clare.  Provided that the EPOA remains valid during the period whilst Jan is the director of the corporate trustee, and given that the other requirements of subparagraph 17A(3)(b)(ii) are satisfied, Clare’s superannuation fund continues to be an SMSF, notwithstanding that Clare is no longer director of the body corporate that is the trustee of her fund.

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