22 Apr 10 SMSFs and trauma insurance policies - SMSFD 2010/1
On 21 April 2010, the ATO issued Self Managed Superannuation Funds Determination SMSFD 2010/1 entitled "Self Managed Superannuation Funds: can a trustee of a self managed superannuation fund purchase a trauma insurance policy in respect of a member and still satisfy the sole purpose test in s 62 of the Superannuation Industry (Supervision) Act 1993?"
It was previously released in draft form as SMSFD 2009/D1.
The question is answered "Yes, a trustee can still satisfy the sole purpose test provided any benefits payable under the policy:
- are required to be paid to a trustee of the self managed superannuation fund (SMSF);
- are benefits that will become part of the assets of the SMSF at least until such time as the relevant member satisfies a condition of release; and
- the acquisition of the policy is not made to secure some other benefit for another person such as a member or member's relative.