SMSF FAQ

A self-managed superannuation fund is a small superannuation trust with the purpose of providing you with retirement benefits. As the member is also the trustee of the fund, you effectively control and manage your own super fund. A SMSF can receive contributions from all sources including your employer, the Government and voluntary individual contributions. And this tax accountant on the Central Coast can help you make the right decisions regarding SMSF.

  1. Control – YOU choose how your retirement assets are invested and managed.
  2. Choice – investment and management decisions are made exclusively by YOU.
  3. Tax effective – take advantage of the lowest rate of tax of any entity in Australia.
  4. Lower fees – compared with other types of super funds.
  5. Up to 4 family members can combine their super balances and reap the rewards.

You can set up your own private super fund and manage it yourself, but only under strict rules regulated by the Australian Taxation Office (ATO).

An SMSF can have between one to four members. Each member is a trustee (or director if there is a corporate trustee). Running your own fund is complex.

When you run your own SMSF you must:

  • Carry out the role of trustee or director, which imposes important legal duties on you
  • Use the money only to provide retirement benefits
  • Set and follow an investment strategy that ensures the fund is likely to meet your retirement needs
  • Keep comprehensive records and arrange an annual audit by an approved SMSF auditor

The Trustees control the SMSF and make all the Investment decisions for the SMSF. The Trustees are also responsible for complying with all legal obligations including ensuring that the SMSF prepares and lodges an annual tax return with the ATO. It is important to understand that the SMSF Trustees do not own the SMSF but are simply responsible for the administration, investment and operation of the SMSF.

The Members own the SMSF. Importantly the SMSF Members have a proportional Interest in the SMSF Assets based on contributions and Rollovers made to the SMSF. This means that if one Member contributes 100% of monies to the SMSF and a second Member contributes no monies, then the Member making the total contributions to the SMSF will own 100% of the SMSF. SMSFs can have a maximum of 4 Members who must all be Trustees.

A Self Managed Superannuation Fund (SMSF) does not suit everyone, however many people are frightened off even considering managing their own superannuation by misinformation in the marketplace.

A key question you should ask is “‘what is right or wrong with what I have now?” As your superannuation grows and you get nearer to retirement, you will often take a much greater interest in it than you did in the past. Legislation now allows many more people to have a choice about their superannuation. You may have a nagging doubt that you could do better or that your current fund is not really meeting all of your needs. You may be looking for transparency and more control over your superannuation, and believe that a self managed super fund is therefore an option worth considering.

A Matter of Control
Most of us have become used to the idea that we have only limited control over our superannuation, however SMSFs provide much more control and say over where, when and how you invest, what you pay for and when you pay for it. SMSFs also provide increased flexibility and the ability to instruct the trustees what to invest in.

After becoming a trustee of a SMSF, initially, many people struggle with the concept that superannuation is really your own money, but it is set aside for retirement.

Yes, there are limitations on when you can get your hands on the money, and how the money can be invested by the superannuation fund, but it is still your money.

The real goal is how can you make the money in your superannuation best achieve your needs and objectives in retirement.

There is no denying that superannuation can be complicated but the skills to run your own superannuation are no different to running a business, managing an office or investing outside of superannuation. A lot of it is common sense, and many of you do these kinds of activities every day.

You probably wouldn’t contemplate an ocean voyage without an experienced skipper and the same applies to setting up and running a self managed fund. Many of our clients whilst taking control of their superannuation, access experienced and qualified advisers when required to help them steer away from the reefs and storms.

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