What is the purpose and use of an SMSF Deed of Variation?
The SMSF Deed of Variation is used to replace old/obsolete SMSF deeds. It is imperative that an SMSF deed must be compliant with the Governing Rules. With the rapidly changing regulations governing superannuation, it is generally recommended to upgrade the deed according to new legislation every 5 years, or whenever a major change occurs. For example:
- A recent major legislative change occurred in July 2021, whereby the number of members in an SMSF were increased from 4 to 6. A person who has 5 family members can update their deed and add another member to the fund.
- If a deed is old or is not compliant with major legislative changes made in 2017, then an SMSF Deed of Variation can be prepared.
- Banks may also request for an updated Deed. If there is an old deed and which has had multiple changes made to it, such as Change of Trustees or Members, the bank can request for an updated Deed of Variation to reflect all the changes to be obtained. The SMSF Deed of Variation would not only update the Deed up to new Legislation, but also mention in the Schedule page the updated Trustees and Members.