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Self-Managed Superannuation

Self Managed Super Funds are becoming increasingly popular as it provides members with control over where to invest their retirement savings. In fact, SMSF's are now the largest and fastest growing sector of the super industry.

There are a great many benefits to having a SMSF but there are also many rules and regulations in the various laws that govern super and it is very important that you do it correctly.

So What is a SMSF?

A SMSF has less than 5 members. Each individual trustee of the fund is a fund member - each member of the fund is a trustee. The requirement that all members to be trustees ensures that each member is fully involved in the decision making process.

Set Up Procedure

• Trust Deed
• Appoint a Trustee
• Elect to become a regulated fund
• Register for a TFN
• Register for an ABN
• Register for GST (if applicable)

Advantages:

• Asset protection
• Lower rate of tax on income and contributions
• At retirement the income earned by the Superfund is tax free
• Allocated pension paid by Superfund is taxed concessionally
• Capital Gains Tax discounts
• Control over investments
• Retirement Planning – payment of pensions
• Can purchase residential real estate (conditions apply)
• Can purchase commercial real estate (conditions apply)

Disadvantages:

• Trustee responsibilities and duties
• Cost of establishing, maintaining and compliance
• Audit certificate required
• Contribution surcharge
• Funds locked until retirement age
• Government legislation may change in the future
• Restriction on type of investments it can hold

Compliance Requirements:

• Business Activity Statements (if applicable)
• Tax Return – yearly
• Financial Statements – Balance Sheet, Profit and Loss, Investment Strategy and Members’ Investment Accounts
• Yearly audit by approved Auditor
 

As a trustee, you need to adhere to the rules as you are ultimately responsible for running the fund. However, it is highly recommended you have tax, financial and super professionals to help you manage it.

We have the skills and experience to:

  • set up the fund and provide advice on legislative requirements for the administration and ongoing compliance
  • perform tax compliance obligations
  • audit the financial position and operation of self-managed superannuation funds

Related Articles:

Thinking About a Self Managed Super Fund?

Property & SMSFs - Loosening the Rules

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