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22 Apr 10 SMSFs and LPRs who hold an enduring power of attorney - SMSFR 2010/2

On 21 April 2010, the ATO issued Self Managed Superannuation Funds Ruling SMSFR 2010/2 entitled "Self Managed Superannuation Funds: the scope and operation of s 17A(3)(b)(ii) of the Superannuation Industry (Supervision) Act 1993".

It was previously released in draft form as SMSFR 2009/D1

Under s 17A(3)(b)(ii,) of SISA, a legal personal representative who holds an enduring power of attorney granted by a member may be a trustee of the SMSF, or a director of the corporate trustee of the SMSF, in place of the member without causing the fund to fail to satisfy the definition of an SMSF.

As the legal personal representative is acting in a personal capacity as a trustee of the SMSF, the legal personal representative is subject to civil and criminal penalties for any breaches of their duties under the SISA or other legislation. Likewise, a legal personal representative who is a director of the corporate trustee is also subject to civil and criminal penalties for breaches of the SISA and the Corporations Act.

The enduring power of attorney must be current and accord with the relevant State or Territory legislation relating to enduring powers of attorney at all times during which the legal personal representative is a trustee, or a director of the corporate trustee, of the SMSF in place of the member.

The ATO advises that particular attention must be given to the trust deed to ensure it allows for the appointment of a person who is not a member of the fund as a trustee in place of the member.

 


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