Hi SMSFAAA
One fund I will be auditing for the 2021 financial year is encountering the following issue:
The fund with individual trustees want to add their son as a member. However, the son has not been added yet but the son has had SGC contributions transferred to the SMSF since July 2020.
The fund is in the process to change the trustee to a corporate trustee.
How does the accountant should account for the son's SGC from July 2020 as he is not a member as yet?
Should they add him as a trustee and member from 1st July (ie creating an amended trust deed) and then a new corporate trustee? Or can they just create the new corporate trustee and add the son as a member from now?
Please let me know :)
Kind Regards
Jean Rey
Hi Ron
Thanks, sorry, I should have made a comment on if the child / son was under age 18.
If a child is under 18 years of age they are under a legal disability & cannot be a trustee of a SMSF. They can be a member but not a trustee of a SMSF. Their parent or guardian can act as trustee (or director) in their place until they reach 18 years of age.
At age 18 it is required that they would be made a trustee (or director). This should be done within 6 months of the child turning age 18.
The SIS legislation that covers these rules is at section 17A(3)(c).
Thanks
SMSF AAA