Hi TaxMan,
Did you receive a proper answer to your question?
Here is my opinion, though I believe the best option will be a Private Letter Ruling from the IRS.
Pursuant to the OZ legislation, employers are the only one who must make mandatory Superannuation contributions to the fund. There is no compulsory employee participation and the employer's contribution is usually fixed to 9 % of the employee's income, subject to a maxim amount. So the actual "grantor" of the corpus of the Superannuation fund is generally the employer. However the SMSF rules stipulate that the beneficiaries will have control over the investment and management of the funds (i.e. they will be the trustees). Moreover, the beneficiaries must be related to each other. It is not possible to form SMSF with unrelated parties, so the most common scenario is a husband and wife plus probably dependents. Yet, the SMSF is above all a pension fund, so it is not that easy (but not impossible) to revert the corpus or to gain access to the income prior to retirement. However based on my experience the vast majority of the SMSFs are formed by self-employed individuals or individuals who own the voting rights of an OZ Pty (limited liability company). So binding it up altogether, it appears that grantor, the beneficiaries and the trustees of the SMSF are either one and the same person or subordinate or related to each other. Having in mind the provisions of IRC 671 - 679 and Treas. Reg. 1.1441-1©(26), it appears that the SMSF is a foreign grantor trust. How do you feel about it?
Hristo
