WHAT ARE SELF MANAGED SUPERANNUATION FUNDS
Like other superannuation funds, self managed super funds (SMSFs) are a way of saving for your retirement. The difference between a SMSF and other types of superannuation funds is that, generally, the members of an SMSF are also the trustees. This means the members of the SMSF operate the Fund for their own benefit.
SMSFs must be established for the sole purpose of providing benefits to fund members on retirement, or, if the member dies before retirement, a benefit to that member’s dependants.
A SMSF is restricted to 4 or less members. Each member must be a trustee of the SMSF, or a director of a corporate trustee of the SMSF. The trustees of the SMSF are ultimately responsible for managing the SMSF. As the fund is controlled by the members, they have greater control over their retirement savings than they have with other types of superannuation funds such as industry or retail super funds. This includes wider investment choice and greater control over investments and flexibility in the payment of retirement benefits, such as pensions, directly from the fund.
The Australian Taxation Office is the regulator of SMSFs (LINK TO ATO – www.ato.gov.au/Super/Self-managed-super-funds/)
Why establish a SMSF?
Advantages of a SMSF include:
- Able to invest, so that income and capital gains are taxed at the lower superannuation tax rates.
- Able to invest in a wide range of assets, including direct property, which are not normally available in traditional super funds.
- Able to co-ordinate your superannuation investment strategy with your non-superannuation assets.
- Able to structure income streams or pensions in a way, that suits you and your family.
- Able to structure your estate planning to ensure certainty about what happens to your assets when you pass away. An SMSF offers many advantages for estate planning over other ownership structures and over traditional super funds.
- Ability to control all key decisions, including investment decisions, but still having the ability to take advice from specialists. You will need specialist accounting, taxation, investment, estate planning and strategic advice for your fund.
- A SMSF can give you the ability to transfer personally owned listed shares and some property into your fund
Requirements for establishing a SMSF
To establish a SMSF, the fund must meet the following conditions:
- Have 4 or less members
- Each member of the fund must be a trustee of the fund
- No fund member can be an employee of another fund member, unless they are related, and
- No trustee of the fund can receive remuneration for their services as a trustee.
A SMSF can alternatively have a company trustee (known as a corporate trustee). Each director of the trustee company must be a fund member, and each fund member must be a director of the company.
There are some exceptions involving single member funds and minors.
Setting up and administering your SMSF
With Supercom’s service, you’ll benefit from the significant advantages of a self managed super fund without having to worry about ongoing administration and compliance.
Our SMSF services include:
- Establishing your SMSF – We can help you with all the documents required to establish a self managed super fund.
- Administering your SMSF – We can prepare all the documents required to administer and account for your Fund
- Investing in your SMSF – We can help you develop your fund’s investment strategy and portfolio and provide ongoing investment advice and management.
The compliance requirements for Trustees can be extensive and Supercom can help you in the following areas:
Setting up your SMSF
- Arranging preparation of your SMSF’s trust deed
- Completing and lodging your ATO application forms
- Providing trustee declarations and appropriate Minutes
- Completing death benefit agreement forms that provide guidance on how members want their assets distributed
- Provide an investment strategy template for your SMSF
- Provide pension commencement documentation if required
- Establishment of a trust for a borrowing arrangement to acquire property
Administering your SMSF
- Preparation of annual financial statements, including operating statement, statement of financial position, notes to financial statements
- Prepare individual member benefits statements including movements and member’s tax components
- Calculate minimum pension payments
- Audit of the fund by an approved independent SMSF auditor
- Prepare and lodge the fund’s income tax return
- Provide assistance to trustee’s with the preparation of the fund’s investment strategy and their reporting obligations
- Obtain actuarial certificates where required
Investing in your SMSF
- Provide advice on what investments a SMSF can or cannot invest in
- Provide advice on investments appropriate to your own SMSF