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Related Parties
Self managed superannuation funds (SMSFs) often deal with persons or entities that can be classified as related parties. It is important to understand who is a related party of the SMSF as there are certain limitations on the size of investments that SMSFs have with related parties as well as the types of transactions that may exist between the SMSF and a related party.

A related party of a superannuation entity is any one of the following:
  • A member of the fund, including members who have deferred their entitlement to receive a benefit from the fund, and pensioners of the fund.
  • A standard employer-sponsor of the fund. For example, an employer who contributes, or would contribute, in accordance with an arrangement between the employer and a trustee of the fund.
  • A ‘Part 8” associate of a member or standard employer-sponsor of the fund as defined by the Superannuation Industry (Supervision) (SIS) act.

A Part 8 associate of a member or standard employer-sponsor can be defined according to the following definitions:

If the primary entity is an individual (such as a member) or where a standard employer-sponsor is an individual:
  • A relative of the individual (parent, grandparent, brother, sister, uncle, aunt, nephew, niece, lineal descendant or adopted child of the individual or their spouse)
  • The spouse of the individual or of one of the above mentioned relatives

If the fund has fewer than five members:
  • Each other member of the fund
  • If it is a single member SMSF whose trustee is a company – each director of that company
  • If it is single member SMSF whose trustees are individuals – those individuals

A business partner of the individual or a partnership in which the individual is a partner

A trustee of a trust (in capacity as trustee) that is controlled by the individual

A company sufficiently influenced by, or in which a majority voting interest is held by:
  • The individual, or
  • Another Part 8 associate of the individual, or
  • Two or more entities covered by the preceding subparagraphs
Where the primary entity is a company, (for example, where the standard employer-sponsor is a company), including a company in the capacity of a trustee: A partner of the company or a partnership in which the company is a partner

If a partner is an individual, the spouse or child of that individual

A trustee of a trust (in the capacity of trustee of that trust) where the trust is controlled by the company

A controlling entity or another entity that is a Part 8 associate of the controlling entity, or a combination of two or more such entities that on its own can sufficiently influence, or holds a majority voting interest in, the company

Another controlled company which the primary entity sufficiently influences, or in which the primary entity holds a majority voting interest, alone or with another entity that is a Part 8 associate of the primary entity, or a combination of two or more such entities
Where the primary entity is a partnership (such as the standard employer-sponsor is a partnership) A partner in the partnership

If a partner in the partnership is an individual, any Part 8 associate of that individual

If a partner in the partnership is a company, any Part 8 associate of the company

Disclaimer: The information contained in this document is given in good faith and has been prepared from information believed to be accurate and reliable. This information is of general nature only and based on Multiport’s interpretation of the present laws but no guarantee is provided. This document is not designed to be a substitute for financial or investment advice and should not be relied upon as such. Reproduction of material in this document is only permitted with approval of the author.
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