Issue
Will a Self Managed Superannuation Fund (SMSF) with two members continue to satisfy section 17A of the Superannuation Industry (Supervision) Act 1993 (SISA), where one of the members has an enduring power of attorney in respect of the other member and as a result acts as the sole trustee of the fund?
Decision
Yes. A SMSF with two members will satisfy section 17A of the SIS Act, where one of the members has an enduring power of attorney in respect of the other member and as a result acts as the sole trustee of the fund.
Facts
The Self Managed Superannuation fund has two members.
Both members are currently trustees of the fund.
Member one holds an enduring power of attorney with respect to member two.
Member one will act as trustee in place of member two by acting as member two's legal personal representative.
Reasons for Decision
Section 17A of the Superannuation Industry (Supervision) Act 1993 (SISA) includes the following requirement:
'SECTION 17A DEFINITION OF SELF MANAGED SUPERANNUATION FUND
17A(1) Basic conditions - funds other than single member funds
Subject to this section, a superannuation fund, other than a fund with only one member, is a self managed superannuation fund if and only if it satisfies the following conditions: ..... (d) each member of the fund: (i) is a trustee of the fund; or (ii) if the trustee of the fund is a body corporate - is a director of the body corporate;'
Paragraph 17A(3)(b) of the SISA provides that a superannuation fund does not fail to satisfy the conditions set out in subsection 17A(1) of the SISA by reason that the legal personal representative of a member of the fund is a trustee of the fund in place of the member during any period that the member is under an legal disability or the legal personal representative has an enduring power of attorney in respect of the member.
In applying these provisions to the facts of this case, it is apparent that member one, acting as member two's legal personal representative, can be a trustee on behalf of member two.
As a result the fund will still meet the definition of a self managed fund as per subsection 17A(1) of the SISA.