Self Managed Superannuation Funds Determination SMSFD 2010/1W
Status: withdrawn








Withdrawal notice: Self Managed Superannuation Funds Determination SMSFD 2010/1 is withdrawn with effect from 1 July 2014. 1. SMSFD 2010/1 expresses the Commissioner's view that a trustee of a self managed superannuation fund (SMSF) can purchase a trauma insurance policy in respect of a member of that fund and still satisfy the sole purpose test in section 62 of the Superannuation Industry (Supervision) Act 1993 (SISA) provided: 2. Subregulation 4.07D(2) of the Superannuation Industry (Supervision) Regulations 1994 (SISR) states that a trustee of a regulated superannuation fund must not provide an insured benefit in relation to a member of the fund unless the insured event is consistent with a condition of release specified in items 102 (Death), 102A (Terminal medical condition), 103 (Permanent incapacity) or 109 (Temporary incapacity) of Schedule 1 to the SISR. 3. Regulation 4.07D of the SISR applies from 1 July 2014. 4. However, subregulation 4.07D(2) of the SISR does not apply to the continued provision of an insured benefit to members who joined a fund before 1 July 2014 and were covered in respect of that insured benefit before 1 July 2014. 5. The insured event under a trauma insurance policy, as described in SMSFD 2010/1, is not consistent with any of the conditions of release set out in subregulation 4.07D(2) of the SISR. Therefore, from 1 July 2014, a trustee of an SMSF is prohibited from providing such an insured benefit in relation to a member unless the member joined the fund before 1 July 2014, and was covered in respect of that insured benefit before 1 July 2014. 6. It is the Commissioner's view that an SMSF trustee that continues to provide a trauma insurance benefit to a member who joined the fund before 1 July 2014, and was covered in respect of that insured benefit before 1 July 2014, can purchase a trauma insurance policy to support the provision of that benefit and still satisfy the sole purpose test in section 62 of the SISA provided the conditions set out in SMSFD 2010/1 are met. Commissioner of Taxation 25 June 2014 © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). Previously released in draft format as SMSFD 2009/D1

Related rulings: SMSFR 2008/1 SMSFR 2008/2
Legislative references: SISA 1993 SISA 10(4) SISA 17A SISA 62 SISA 62(1) SISA 1993 62(1)(a) SISA 1993 62(1)(b) SISA 65 SISR 1994 SISR Pt 6 SISR 1994 Sch 1
Subject references: breach of sole purpose self managed superannuation funds SMSF investments sole purpose superannuation