From 1 July 2021, the maximum number of members for self-managed superannuation funds (SMSF) and small Australian Prudential Regulation Authority (APRA) funds increased from four to six.
Those expected to use it are families with more than two adult children.
SMSFs are often used by families and start off with a couple who want to add children once they become old enough to work and contribute to super. If families have more than two children, then a large fund allows up to four children to be added. It also enables spouses of children to be added if families are not too large.
Potential benefits to members may include an increase in investment strategies available to the fund, as it now has a larger pool of funds at its disposal.
Pooling funds could open up commercial property investment opportunities to members. This could be particularly advantageous for small and family businesses, wishing to buy business premises – business real property – and lease the property back to the fund.
SMSFs can either have individual trustees or a corporate trustee where all members are directors of the corporate trustee. Some State and Territory laws restrict the number of trustees a trust can have to less than six. An SMSF is a type of trust, so it is important that you seek professional advice to help you understand if your SMSF is impacted by these restrictions. To avoid this issue SMSFs can have a corporate trustee and each member is a Director of that corporate trustee.