A self-managed super fund (SMSF) is a super fund that you manage yourself – giving you greater control over your super and more flexibility than you would get with a conventional super fund.
An SMSF provides retirement benefits for its members in the same way as any regular super fund. However, there are particular rules and regulations that trustees of an SMSF must ensure they adhere to.
What does it mean for me?
Setting up an SMSF has its advantages, including:
More control. You choose the investment strategy and the way it is implemented.
Greater investment choice. You may be able to invest in assets such as property, shares, managed funds, ETF’s, cash, term deposits, fixed interests, art and collectibles, although there are some limitations imposed by superannuation law and the trust deed of your fund.
Greater control over costs. Because you can control the investment management, you may be able to minimise the fees and transaction costs incurred by the investment portfolio.
More opportunities for tax-effective investments. You may be able to borrow to invest in income-producing assets such as an investment property or your business premises with the SMSF claiming certain borrowing costs, such as interest, as a tax deduction.
Potentially higher net returns. With the potential for lower costs and reduced tax, you may be able to implement a more effective investment strategy and boost your after-tax returns.
Things you should consider
There are numerous rules and regulations around establishing an SMSF, so it’s important to seek professional financial, legal and tax advice specific to your circumstances.
Some of the general things you should consider include:
• An SMSF can have no more than four members.
• The trustees of an SMSF can be either individuals or a company.
• No member of the SMSF can be an employee of another member, unless the member is a relative.
• Trustees must carry out their duties without payment.
• As a trustee of the SMSF, you are bound by law to responsibly manage the fund and are personally liable for the fund’s actions. You can delegate the tasks associated with administering your SMSF, but not the legal responsibility.
• As a trustee, you will be required to set aside time for the ongoing management of the SMSF. Alternatively you can seek, at a cost, professional assistance from your Financial Planner or Accountant.
The Quinn Group has the expertise to help you build your wealth. For more advice on investing in Self-Managed Superannuation Fund, contact our experienced team of Financial Planners and Accountants here at The Quinn Group. Submit an online enquiry or call us on +612 9580 9166 to book an appointment today.