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SMSF has invested in an unlisted trust. Unlisted trust has a trustee company. SMSF member is the secretary of the trustee company of unlisted trust.
Is it a related party then? any other breach?
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Hi Rashmi
The fact that the member is a secretary does not make the trust a related party by itself. A secretary would not normally be deemed to control the trust so simply being a secretary will not make it a related party.
Where it is complicated is that a member could be the sole director and sole secretary of a trust and this entity would not be an in-house asset if it met the requirements of SIS Regulation 13.22C being an ungeared unit trust.
Another example is that if the Fund owns more than 50% of the units of a unit trust (and it did not meet SIS Regulation 13.22C) and the member was a secretary but not a director the asset would be an in-house asset.
Can you please explain your query in terms of:
What does the trust do? (Is it a SIS Regulation 13.22C Trust?)
Are the members of the SMSF directors of the trustee of the trust?
What % of the Trust is owned by the SMSF and any related parties?
Once I better understand the structure I can further advise.
Thanks
The Auditors Institute