Super: Assets not held by SMSF – available to creditors

   Posted by Admin

The Federal Court has ruled that certain assets of two undischarged bankrupts were not held in their SMSF and were therefore divisible among the creditors of their bankrupt estates. They sought to rely on s 116(2)(d)(iii)(A) of the Bankruptcy Act 1966 which provides an exception to assets available to creditors for "the interest of the bankrupt in...a regulated superannuation fund". However, the court determined that they failed to show that the disputed assets were held on the terms of the SMSF for the beneficiaries of the SMSF. (Frigger v Trenfield (No 10) [2021] FCA 1500, 1 December 2021.) Comment: This case therefore provides some important lessons for SMSF trustees on the importance of keeping records of SMSF assets and maintaining compliance for the fund.