Mr Munro had a SMSF and had filled out a BDBN with the nominated beneficiary being the Trustee of his estate. After his death, a dispute arose, surrounding whether Mr Munro’s nomination for a BDBN had to comply with reg 6.17A of the Superannuation Industry (Supervision) Regulations 1994 (Cth). This regulation contains conditions that dictate how someone who is not a trustee can exercise discretion in respect of the death benefits of Mr Munro.
The ATO had released the SMSFD 2008/3 which stated that,
“regulation 6.17A… do not apply to… SMSFs.”
Therefore, the trust deed of a SMSF can allow the SMSF’s member to make BDBNs that can be binding on the trustee,
“whether or not in circumstances that accord with the rules in regulation 6.17A.”
The Judge of the dispute, Mullins J, stated that,
“Although SMSFD 2008/3 is not binding on the court (or the Commissioner of Taxation) it sets out a logical approach to the construction of s 59 of the SIS Act which I consider correct and adopt for the purpose of determining the applicability of reg 6.17A of the SIS Regulations to the fund.”
Therefore, the Reg 6.17A does not have to be complied with and it is the requirements within the trust deed that are what need to be complied with. Additionally, it found that the Trustee of Mr Munro’s estate did not mean the executor of the estate. As this individual was not a nominated dependant, they found that this nomination did not comply with the trust deed of the SMSF and therefore was not binding to the trustee.
Narumon Pty Ltd (2018) QSC 185
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