A self managed superfund (SMSF) is a small superannuation trust that has the primary purpose of providing retirement benefits to the members, where the members themselves act as trustees. This means that the self managed super funds accounting services control and run the superfund. Self managed superfund operates in much the same way as other types of superfund. The trustees hold the assets of the superfund for the benefit of the members. In a self managed superfund the members, being also the trustees, hold the assets of the superfund. As the members hold the assets, they have complete security, control and flexibility over their superannuation.
The members, being also the trustees, develop the investment strategy, make investment decisions and invest accordingly.
Self managed superfunds can invest in almost any investment products, subject to certain restrictions, commercial and residential property directly, and other more exotic assets.
Generally, a self managed superfund is defined as a superannuation fund where:
** there are less than five members,
** all the members are trustees, and
** no trustees receive any remuneration for self managed super funds accounting services.
Except for single member self managed superfund or a super managed superfund with a corporate trustee.
The most common arrangements for a single member self managed superfund are:
** two trustees, one is the member and the other is a relative of the member,
** the body corporate acting as trustee, where the member is the sole director of the body corporate, or the member is one of only two directors of the body corporate, and the member and the other director are relatives
In the case of a self managed superfund with a corporate trustee with more than one member, all members must be directors of the body corporate, and all directors must be members of the self managed superfund.
During the accumulation phase, the goal is to grow your superannuation and maximise returns within an acceptable level of risk. You, as trustee, will invest accordingly having regards to members’ objectives and circumstances. When a member retires and commence a pension, the self managed superfund will make pension payments to the member. This may involve selling some of the superfund assets to enable the superfund to make the pension payments.
At the centre of your self managed superfund is a bank account or cash account. Contributions, roll-overs and investment incomes are deposited into the superfund’s bank account or cash account. The funds in the bank account or cash account are used to make investments in accordance the formulated investment strategy. The members, also acting as trustees, decide on the timing of acquisition and disposal of assets.
Self managed super funds (SMSFs) give you more control over your super and retirement planning, but there are complicated rules and regulations that govern them. Working with experienced and qualified accountants will ensure your SMSF meets obligations and remains compliant. Property purchased through an SMSF cannot be lived in by you, any other trustee or anyone related to the trustees – no matter how distant the relationship.
The SMSF Solutions team is qualified and experienced to provide you with a full range of SMSF services to get you set up and managing your SMSF. We will help you establish a new self managed super fund, meet annual compliance obligations and use the latest online tools to monitor and manage your investments. This is an area where you really do need to make sure you know what you’re getting into.
We are an independent, unbiased service provider. And we are licenced to provide you with financial advice in relation to setting up an SMSF. Investing in property though a self-managed super fund (SMSF) has grown in popularity in recent years, particularly since it became possible for SMSFs to borrow money to fund a direct property purchase.
The number of self managed super fund’s has surged in recent years with many stating a Self Managed Super Fund (SMSF) has become the ‘must have financial fashion accessory’. Traditionally an area occupied by high net wealth individuals, professionals and small businesses, due to the significant reduction in compliance costs and the introduction of the ability to borrow to purchase property, self managed super funds accounting services have now become a viable option to manage retirement savings to a much larger cross section of the population.
When establishing a self managed super fund (SMSF), you are able to elect a company or individual to act as the trustee of the fund. Often electing individual trustees is more popular, with the ATO’s statistical reports indicating that approximately 77% of all SMSF are structured in this way.
It seems most people are drawn to establishing an individual trustee structure simply because of the cheaper initial cost. While the establishment fee for a corporate trustee structure is higher due to the need to establish and register the company with ASIC, it can be expected to deliver considerable monetary savings over the longer term. In this guide, we will take a look at some of the significant advantages of running a corporate trustee as opposed to running an SMSF with individual trustees.
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