Well … as expected, this year’s Federal budget was quieter for SMSFs and super than some years. The main impact on SMSFs was an increase in the maximum number of members from four to six, three yearly audits for funds with good track records and a possible increase to the supervisory levy. Let’s look at the increase to six members and the impact on fund operations. We’ll get to the others in future if they take place.
An increase in the number of members may bring a range of benefits. For some it could mean greater flexibility, particularly for small businesses with multiple owners who wish to pool their superannuation into one fund. Also, family businesses could benefit by providing better access to an intergenerational transfer of assets owned by the fund, especially business property. More members are likely to permit greater access to a larger pool of assets accumulating in the one SMSF rather than having to spread things over many funds.
An increase in the number of members and, potentially a higher value in assets accumulating in funds with more members, may provide some benefits if the limit to franking credit refunds ever comes about. Excess franking credits could be absorbed in the fund and offset against non-franked income and taxable contributions.