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Australia’s superannuation habits have shifted with the rising popularity of self managed super funds, and even more so as multi member SMSFs become more readily accessible.

Members and trustees within an SMSF play interconnecting roles in the operation of the fund, yet there are distinctions to these roles.

This article discusses how members and trustees work within SMSFs and introduces multi member SMSFs. We discuss how many members can an SMSF have, and list the steps to setting up your multi member SMSF.

This article is intended for informational purposes only and does not take into consideration your personal financial situation. Always seek legal and financial advice when considering a Self Managed Super Fund.

The Introduction of Multi Member Self Managed Super Funds

Multi member SMSFs are private funds with between two to six members, each of whom acts as a trustee or director of a corporate trustee to the fund. Multi member funds most commonly include spouses and their children, with only those children aged over 18 years of age listed as trustees to the fund.

Multi member SMSFs offer a collaborative approach to managing retirement savings, while providing greater flexibility and shared decision making.

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A multi member SMSF operates under the same regulatory framework as a single member SMSF. Compliance with strict SMSF rules is essential to ensure the fund’s eligibility for tax concessions and to safeguard the interests of the fund members.

Some of the benefits of a Multi Member SMSF include:

  • Added flexibility
  • The ability to split ongoing costs
  • Larger families can be included in a single fund, as the maximum members allowed has increased to more than four members
  • Allows for the fund to potentially qualify as an Australian superannuation fund if one or more members travel overseas
  • From a lending viewpoint, more members means more individuals contributing super to the SMSF meaning you may need to borrow less, or can borrow more due to the higher SMSF income.

However there are some drawbacks, for example:

In the event that members wish to opt-out, assets will need to be sold or transferred to a new fund; likely resulting in capital gains tax and stamp duty ramifications.

Six member SMSFs open the door to an increased number of disputes, as more parties are involved. Further discrepancies may arise in the event of one member’s death.

How Many Members Can an SMSF Contain?

With fairly recent amendments to SMSF rules, many are wondering how many members can a SMSF have?

The number of members permitted to be involved in a private super fund increased as of July 2021.

Self managed superannuation funds can now have up to six members. Typically, a six member SMSF would include two spouses and their children, though it can include anyone other than an employee of another member, unless they are related to each other [1].

One of the primary benefits to a six member fund is that more family members are able to share the fund. Having multiple fund members also increases the access to certain benefits that would not be attainable in a single member fund.

Investment Advantages of Multi Member SMSF

There are several advantages of multi member funds which make them an appealing option to some, including:

1. Cost Efficient

Expenses such as administration costs, set up costs, operating costs and investment management fees can be divided amongst more members rather than on only one member.

This is beneficial for younger members who may be just started out, whose low balance might otherwise place an SMSF out of reach. The primary SMSF members are benefitted too, as the increase in balance will reduce costs as a percentage of assets [1].

2. Diversification of Assets

With multiple members contributing to the fund, a broader range of investment opportunities becomes achievable. Diversification spreads risk and may potentially enhance the fund’s overall performance.

3. Additional Investment Options

Multi member funds allow for investment in larger assets, such as business property. Once a property is acquired by an SMSF it can be leased back for business use without the 5% limit on in house assets applying [3].

4. Collaborative Decision- Making

Each member in the SMSF has a say in the fund’s investment strategy, asset allocation, and major decisions. This democratic approach ensures that the fund’s activities align with the diverse financial goals and risk tolerances of its members.

5. Family Succession Planning

Family member SMSFs allow for structured way to collaborate on managing family wealth via shared investment strategies and ensures a smooth transition of assets from one generation to the next.

6. Potential for Increased Returns

Multi member SMSFs can offer tax advantages, such as concessional tax rates on investment income and capitol gains. Managing the timing of contributions, pension payments, and other transactions can increase tax efficiency, which may lead to better overall performance compared to passive investment options.

The Difference Between Members and Trustees Within an SMSF

While members are the contributors and ultimate beneficiaries of the SMSF, trustees are responsible for the legal and operational aspects of managing the fund.

So does an SMSF trustee have to be a member?

The Australian Taxation Office highlights that each SMSF member must be a trustee, and each trustee must be a member of the fund [3].

Members are the individuals who contribute to the SMSF and benefit from it upon their retirement. Members can also be trustees or directors of a corporate trustee, depending on the structure of the fund.

Trustees are individuals or a company appointed to manage and administer the SMSF on behalf of its members.

The member’s responsibilities include:

  • Contributions
  • Investment decisions
  • Record keeping and reporting

The trustee’s responsibilities include:

  • Ensuring compliance
  • Legal duties
  • Investment strategy
  • Decision making

An SMSF must have a minimum of two individual trustees or a minimum of one corporate trustee which has at least one director.

Trustees of multi member SMSFs are bound by legalities similar to those in single member SMSFs.

It’s important to note, that while Individual trustees are compliant, many SMSF lenders such as Homestar will only lend to an SMSF with a corporate trustee.

When setting up the SMSF for lending, the trustee of the SMSF cannot be the same as the trustee of the security/property bare trust.

Can Your Children Be Members Within Your Fund?

Who can be a member of an SMSF?

Yes, your children can be members of your SMSF. Children of any age can belong to an SMSF, however only those aged at least 18 years must be, except when power of attorney is granted, a trustee of the fund [1].

Usually, employer/employee relationships are restricted from entering into SMSFs as members together. An exception is granted in the event that those two members are related to each other.

If you are wanting your adult children (i.e. above 18 years of age) to be members of the fund, remember they will also need to personally guarantee any Limited Recourse Borrowing Arrangements the fund enters into.

Next Steps to Setting up a Multi-Member Self Managed Super Fund

The ATO provides clear steps to researching and setting up your SMSF here. These steps include:

  1. Determine Eligibility
  2. Select Trustees
  3. Create the Trust Deed
  4. Register with the ATO
  5. Seek Professional Advice

It is recommended that you read the Starting a Self Managed Super Fund PDF available on the ATO website, and engage professional advice.

For those wishing to add new members to their existing fund, the process includes:

  1. The new member will need to complete an application for membership, consenting to joining the SMSF
  2. For members over 18 years of age, they must consent to becoming a trustee of the fund
  3. Sign and submit a trustee declaration form from the Australian Taxation Office ATO

Setting up and managing a SMSF requires solid understanding of legislation and financial matters. A fund member should consult with a knowledgable financial advisor or accountant to help navigate the complexities of running a multi member SMSF in Australia.

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A self managed super fund is one way to stay in control of your retirement savings. Multi member SMSFs allow for collaboration, flexibility and increased investment opportunities.

You must ensure you have a solid understanding of SMSF rules to ensure your fund is compliant and eligible for tax concessions. Remember, failure to comply risks harsh penalties.

If you would like to learn more, please consult with a Homestar Finance lending specialist to discuss your SMSF loan requirements.

Disclaimer: This article is not intended as legal, financial or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature you should seek advice from a qualified and registered Australian legal practitioner or financial or investment advisor.  


[1] Superguide, 2023. SMSF Compliance: What are Trustees Responsibilities?

[2] Australian Taxation Office, 2023. Forms and Instructions.

[3] Australian Taxation Office, 2023. Appoint Your Trustees or Directors.

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