SMSF deed updates: when and why your deed needs attention
Superannuation legislation changes frequently, and your SMSF trust deed must keep pace. An outdated deed can prevent the fund from doing things that current law permits, or worse, it may allow the fund to do things that current law prohibits, exposing the trustees to compliance action by the ATO.
Key legislative changes that may require a deed update include the increase in member limits from four to six (from 1 July 2021), changes to contribution caps and bring-forward arrangements, the introduction of the transfer balance cap for pension phase accounts, changes to the total superannuation balance thresholds, updated pension payment requirements, and changes to binding death benefit nomination provisions.
A deed update (or deed of variation) should not be confused with a full deed replacement. A variation amends specific clauses of the existing deed while leaving the rest intact. A full replacement substitutes the entire deed with a new document. Both are valid approaches, but a variation is generally simpler, cheaper, and less likely to trigger unintended stamp duty or CGT consequences.
Trustees are expected to understand their obligations under current super law, and being unaware of a legislative change is not a defence to a contravention. If your deed has not been updated since the last major legislative change that affects your fund, you should arrange a review. Common red flags include deeds that reference the four-member limit, deeds that do not include transfer balance cap provisions, and deeds that do not address the current binding death benefit nomination requirements.
CoSec Partners prepares SMSF deed variations for $418 including GST, drafted and signed off by Key Legal, an independent external law firm. We can also review your existing deed and identify whether a variation is required.
Frequently asked questions
How often should an SMSF deed be updated?
There is no fixed interval. The practical test is whether the deed has been reviewed since the last legislative change that affects the fund. A deed that predates the six-member limit, the transfer balance cap, or current death benefit nomination requirements should be reviewed now.
Is a deed variation better than a full deed replacement?
Usually. A variation amends the specific clauses and leaves the rest intact, which is simpler, cheaper, and less likely to raise unintended duty or CGT questions. A full replacement is the right answer where the existing deed is so dated that clause-by-clause amendment is impractical.
What are the warning signs of an outdated SMSF deed?
References to a four-member limit, no transfer balance cap provisions, no non-lapsing binding death benefit nomination power, outdated pension payment provisions, and contribution acceptance rules that no longer match the law. Any one of these is reason to have the deed reviewed.
This article is general information only and does not constitute legal, financial, or tax advice. While we endeavour to keep content accurate and current, laws and regulations change frequently. For advice specific to your circumstances, please consult a qualified professional adviser. CoSec Partners Pty Ltd accepts no liability for actions taken based on this content.