To currently comply, a SMSF trustee must meet certain documentation and net asset test, including the proposed geared investment asset. All SMSF Members must also be in Accumulation Phase and not Pension Phase when the SMSF loan commences. Limited exceptions may be assessed on a case-by-case basis.
SMSFs are a type of superannuation fund effectively enabling its members to participate in the management of their own superannuation investment portfolio, in-line with their fund’s authorised investment strategy.
To be a complying SMSF for the purposes of the Income Tax Assessment Act 1936 and Income Tax Assessment Act 1997, a SMSF must first elect and receive approval to be a regulated superannuation fund and abide by the SIS Act on an ongoing basis. In general, the SIS Act requires the following criteria to be met for a superannuation fund to be a SMSF (with a few exceptions):
+ The fund has a maximum of four members, all of which are individuals
+ No member of the fund is an employee of another member of the fund, unless they are related,
+ Each eligible member is either an individual trustee or in the case of a corporate trustee a director of the trustee company; and
+ No individual or corporate trustee, or director of the trustee company receives any remuneration for their services as trustee or director.