A Self Managed Super Fund is often referred to as an SMSF or “Do It Yourself” (DIY) super fund. SMSF’s allow you, the individual greater control and flexibility with the growth of your retirement savings. This makes it an appealing option to the individual who wants to take an active role in how their retirement savings are invested.
SMSF’s appeal to those who want to invest in assets outside of the customary super funds (ie: retail, industry or corporate). SMSF’s also provide a broader investment choice than other super funds. Your SMSF can invest in the familiar (ie: rental properties) to the unusual and interesting collectable (ie: jewellery, art or wine) although there are restrictions on these types of assets.
The main difference between an SMSF and other Superannuation Funds, is that the members have complete control of their investment choices. As Trustees of the Fund, they are also required to prepare and implement an Investment Strategy for their fund, accept contributions and manage the payment of benefits.
• Increased control over your retirement funds and how they are invested.
• Instant access to your fund and its performance (depends on your accountant and the software they use).
• Wider Investment choice than Public Offer Funds, including Property.
• Your SMSF can move with you from job to job, and from generation to generation.
• Tax Concessions.
• Estate Planning.
• Affords opportunities for Estate Planning and benefit payments.
• Each trustee bears a high degree of responsibility to ensure all trustee duties are exercised in the best interest of the fund members.
• There is a risk of tax penalties for non-compliance, so it is necessary to have sufficient basic knowledge of requirements.
• SMSF’s incur a range of costs such as accounting fees to prepare financials and tax returns, auditing of accounts and ATO supervisory fees.
• An SMSF must be maintained for the sole purpose of providing retirement benefits to its members. Investments must be entered into with a view to achieving a commercial rate of return, not for a lifestyle or private purposes.
• An SMSF must have no more than four members who must be related parties.
• If your SMSF is a single member fund, you will need to appoint a company as a trustee and the member must also be the director of the trustee company or you need a second person to act as an individual trustee.
• All members must be trustees.
• No member of the fund can be an employee of another member of the fund, unless those members are related.
• No SMSF trustee of the fund can receive any remuneration for services as trustee.
• An SMSF cannot lend money or give financial assistance to a member.
• The SMSF cannot acquire an asset from a member of the fund, or any other person related to the trustee, with the exception of listed shares, managed funds, and business real property.
• SMSF’s are prohibited from borrowing. There are limited exceptions being for Property Purchase.
• Complete understanding of your obligations and requirements explained in easy to understand terms.
• Live reporting of your Fund using Class Super, where you can log on at any time and see your funds balance, how it’s performing, contributions made and balance of cap, what pension you have to draw and what is available for drawing etc.
• Reliable advice when you need it.
• Tax planning that incorporates your superannuation and your business entity/ies.
• Your tax return and financials completed and lodged virtually within the first few months of the new Financial Year.
• Monthly affordable Set Accounting fee payments via Direct Debit as opposed to a lump sum fee at the end.
• Set Audit fee.
• Set fee for the Setup of the SMSF.