Understanding Who is a Related Party

Understanding who is a related party of a fund is important as it can often affect the administration and compliance of a fund particularly if a fund invests in unlisted assets.

A related party to an SMSF includes a member of the fund, a standard employer sponsor of the fund, and a part 8 associate of a member or standard sponsor of the fund.

A Part 8 Associate of a member includes, a relative, other members of the fund, partners in a partnership, a company that is sufficiently influences or which a majority of voting interest is held by the individual and Part 8 associates.

A relative includes a parent, grandparent, brother, sister, uncle, aunt, nephew, niece, grandchild, adopted child, and spouse.

A relative however does not include former spouse or cousins which means that provided a former spouse or cousin is not a member of the fund, the fund can lend them money (on commercial terms) and that when determining if a member has controlling interest in a company, then former spouse or cousins interest is not included.