What is a Self Managed Superannuation Fund (SMSF)?

Written by Hein Preller , Posted in General News

What is a SMSF (Self Managed Superannuation Fund)?

A  SMSF (Self Managed Super Fund) allows Memberse to control their own super investments for retirement purposes. A SMSF can have from 1 to 4 members in the Fund. Each Member must be a Trustee or Director of the Corporate Trustee. Trustees decide how the SMSF will operate and what investments the SMSF will invest in. If you set up a SMSF, you’re responsible for running it in accordance with the law and reporting to the ATO on its operation.

What are the advantages of an SMSF?

The advantages of a SMSF are as follws:

Control – An SMSF provides maximum control over your superannuation assets and allows you the flexibility to decide how your funds are invested and how the fund is to operate.

Investment Choice – An SMSF can be structured to meet the specific investment needs of Members and control over investment strategies. The SMSF can invest in property, shares, cash or any other assets that suits the investment objectives of the fund (provided it meets the sole purpose test).

Tax Concessions – Investing in an SMSF has tax advantages that make superannuation a powerful wealth creation strategy.

  • The concessional 15% tax rate applies to income of the fund, including contributions for which the tax payer has claimed a tax deduction
  • Realised capital gains on investments held for more than 12 months are taxed at an effective rate of 10%
  • Tax can be lowered through the use of franking credits and the offsetting of capital losses
  • Tax free end result, your pension income

 

Is a SMSF right for me?

There is a range of booklets issued by the ATO that you can read through to consider if a SMSF is appropriate for you. To access this list, click here.

 

How long does it take to set up an Self Managed Superannuation?

It takes between 2 and 12 days to set up a new fund and for more info on this, click here.

Hein Preller

Hein is a Director at Superannuation Warehouse, specializing in setting up new SMSF's. Hein's company performs all the annual administration tasks consisting of preparing financial statements, lodging a tax return and arranging the audit.

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Comments (2)

  • hein

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    Suzan,

    Your age is smack bang in the middle where people typically start a SMSF. Most funds we set up are for people from their late 30’s to early 60’s. There’s no regulatory minimum or maximum age.
    Trust this answers your question.

    Hein

    Reply

  • Ava S. Riddle

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    What can’t I do?You will not be able to do the following things without holding an AFS licence, even if you are a recognised accountant:2. You cannot recommend that the client dispose of interests in another type of superannuation fund (such as an employer fund or public offer fund), or any other type of financial product, even if the recommendation is for the client to dispose of that product in order to establish or join a SMSF (for example, by rolling over funds from the other superannuation fund to the SMSF).

    Reply

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