Becoming a member of an SMSF is easy, but there are other things that need to be considered
There are very few restrictions on who can become a member of an SMSF, but there are conditions with which members must comply when they are in a fund, a specialist adviser said.
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Aaron Dunn, CEO of Smarter SMSF, said there has been a lot of discussion lately around trustee and member changes in the SMSF landscape – from simple questions around moving individuals into corporate trustees or simply adding members to a fund.
“Unpacking this is an area that has a lot of complexity to it, and you need to start to think about looking at who are members and who are trustees,” Dunn said.
“Mum and dad might sound really simple, but once you start to add elements of complexity into those arrangements, things can look very different, very quickly.”
Tim Miller, head of education and technical for Smarter SMSF, said from a legislative point of view, there are very few actual restrictions on membership from a self managed super fund point of view.
“You have got a restriction primarily in links to employer-employee relationships, so subject to who other members are of the fund, that might restrict who can be a member and a lot of that comes down to related parties,” Miller said.
“The other primary restriction that links itself to membership is somebody who’s bankrupt or somebody who is a disqualified person. If you are a disqualified person, which is defined within the SIS Act, then you can’t be a member of a self-managed superannuation fund.”
Dunn continued that the definition of an SMSF broadly allows anyone to become members in their own funds or in a single fund, but he noted there are examples within other parts of law, where the deed does place restrictions on who can become a member.
“For example, transfers from overseas, whereby the ability to actually get that transfer of money across will require the deed to actually place restrictions on who can become a member of the fund,” he said.
“The deed therefore becomes important as well, because there may be circumstances equally where the members may want to put some form of restriction into that membership to limit who they want to actually come in.”
Dunn added that different jurisdictions may also have different requirements such as funds that may have to deal with UK pensions or potential restrictions that may be needed for State Revenue Office purposes.
Miller said these are some of the things which need to be taken into consideration when looking at the overall structure of the fund.
“It is not just about what the SIS Act says, but also about how all these other events, for want of a better term, are linked to what the members are trying to achieve,” he said.
Dunn said although there are few restrictions on membership, the trustees of the SMSF need to understand that external factors might influence how membership is derived.
“I’m thinking here about, not so much the membership themselves and the fact that they can be members, but where the trusteeship poses a problem,” he said.
“And the obvious one here is where there are children that may want to be admitted into the SMSF.”
Miller continued that this is where the SIS Act becomes more specific, talking about the concept of “legal disability”.
“People who are under a legal disability cannot be trustee, or cannot act as trustee of their self-managed super fund. One of those disabilities is children under the age of 18. So, regardless of the number of kids, if they’re under 18, they can’t be trustees of the fund because of that legal disability,” he said.
“Similarly, someone that has lost capacity to operate as trustee of their fund, which is not a decision that should be taken lightly, is regarded as having a legal disability. You have to contemplate all these additional elements from a trusteeship point of view, on top of your desire to be a member – whether you can actually be the member of the fund, and then, of course, continue to monitor it on an ongoing basis.”
Keeli Cambourne
November 26, 2025
smsfadviser.com
