A one-for-one substitution is not necessary when putting an enduring power of attorney (EPOA) in place to allow an individual or individuals to act on the original trustees’ behalf to ensure an SMSF satisfies the residency test when they are about to spend time overseas.
“What this means is if…we only want to appoint one enduring power of attorney, say [there is a set of parents] who only have one child so mum and dad want to appoint their son, he can act on behalf of both mum and dad and the fund will still meet the [residency test] requirements,” Accurium superannuation adviser Natalie Scott confirmed during a technical webinar hosted yesterday.
She did acknowledge this was not an arrangement that is considered conventional and may raise queries as to the SMSF’s operation.
“It’s going to look a bit strange to the auditor but as long as you have the enduring power of attorney documents to back up [the arrangement] then you can highlight to the auditor that’s why it looks a bit strange,” she noted.
Scott also pointed out an opposite arrangement is also allowable.
“The reverse can also happen. You might have a one member fund [where the member has] two kids and the kids might both want to act on behalf of the one member. [This is allowable] so you can also have more than one [individual] acting as an EPOA as long as that’s what the documentation says as well,” she explained.
She took the opportunity to stipulate the ability for a person provided with an EPOA to act as an SMSF trustee does not automatically happen when they are appointed.
For instance, the individual granted the EPOA will still have to be appointed a director in the case of an SMSF with a corporate trustee structure and complete the ATO trustee declaration.
