Since the Global Financial crisis, many people are becoming more and more concerned with the performance of their superannuation fund. As a direct result of this concern many people are considering taking more control over the trusteeship and the management of their superannuation and establishing a Self Managed Superannuation Fund (SMSF.)
Whilst maintaining a SMSF is not for everyone there is no doubt that it can provide many benefits, especially for people aged over 45, or for those who have children.
The main benefits of a SMSF are:
The key benefit of the SMSF is control. You are the one to sign off on the investment choice and the investment strategy. You can change the asset allocation of the fund at any time – this is considered to be a major benefit particularly in volatile times.
A SMSF enables the passing of wealth between generations in a more tax efficient manner than other super funds.
The investment choice is broader if you manage a SMSF, for example, the SMSF could purchase a home unit, house or commercial factory in the name of the superannuation fund; as opposed to having a small interest in a very large property trust.
Where the member is retired and the SMSF is in pension stage no tax is paid by the fund. While the fund is in accumulation stage (i.e. the member is contributing to super and is not yet retired) the fund is required to pay tax at 15% on the income of the fund and 10% on the capital gains of the fund.
The members do not get charged entry fees when they contribute to the fund, nor exit fees when they withdraw or transfer from the fund.
People running a business can use the funds in their SMSF to purchase their business premises – the business can then rent those premises from the SMSF.
Rather than only contributing cash to your super fund you can transfer listed securities, business property, and or managed funds into your SMSF in order to reduce your overall tax liability.
Just because it is a Self Managed Superannuation Fund does not mean that you have to do everything by yourself. Many SMSF members regularly seek the advice of professionals. Here at The Quinn Group our experienced team of Financial Planners, Accountants and Lawyers can provide you with the total solution and assist you with all your SMSF needs. For advice about whether an SMSF is right for you contact the Financial Planners here at Quinns by submitting an online enquiry or calling us on 1300 QUINNS (784 667) or on +61 2 9223 9166 to book an appointment.