Issue
Whether the contribution of Trade Dollars to a self managed superannuation fund (SMSF) by a related party is in contravention of section 66 of the Superannuation Industry (Supervision) Act 1993 (SISA)?
Decision
Yes. The contribution of Trade Dollars into a SMSF by a related party is a contravention of section 66 of SISA.
Facts
The term 'Trade Dollars' refers to any form of credit unit used in an exchange of goods and/or services between businesses, whether or not an intermediary is involved.
A member of a SMSF wishes to contribute Trade Dollars into their SMSF.
Reasons for Decision
Section 66 of the SISA prohibits the acquisition of certain assets from related parties of regulated superannuation funds. There are some exceptions to this prohibition. The exceptions include: • listed securities transferred at market value, and • business real property of the related party transferred at market value, providing the superannuation fund has fewer than five members.
Apart from the listed exceptions, a complying superannuation fund cannot acquire assets from a related party of the fund. Subsection 10(1) of SISA defines a related party of a superannuation fund to include a member of the fund.
Section 66 of the SISA is contravened when Trade Dollars are contributed to a superannuation fund by a member as this contribution would be an acquisition of an asset from a related party not exempted under subsection 66(2) of SISA.