Self-Managed Super Funds (SMSF)
An SMSF lets you take control of your superannuation + gives you flexibility!
Self-Managed Super Funds – SMSF Advisors
What Is An SMSF?
A self-managed super fund is simply a type of superannuation fund. Â It is a superannuation trust structure that provides benefits to its members upon retirement. Â The difference between an SMSF and other types of funds is that the members of a self-managed super fund are also the trustees. Â An SMSF is established to provide retirement benefits for its members.
Entering into retirement is one of the biggest life choices and changes that will happen to us throughout our lives. Â With a self-managed super fund, you have complete control over your biggest asset that you have worked towards your entire life.
A self-managed super fund can have between 1 – 6 members where each member acts as trustee of the fund or if there is a corporate trustee, each member acts as director of the company. Â Therefore an SMSF is well suited to individuals, couples and families. Â All members must be trustees, and all trustees must be members.
SMSFs are ideal for those who like the control and flexibility that comes with running their own fund and making their own investment choices.
Advantages of a Self-Managed Super Fund
The advantages of a self-managed super fund are as great as you make them. Â An SMSF provides you with more investment choices and estate planning opportunities but the main attraction of an SMSF is that you have control over where your superannuation is invested, additional tax efficiencies, as well as savings on administration fees.
Some of the main benefits of a self-managed super fund include:
- Greater flexibility with tax
- Greater control over investments
- Potentially lower fees on higher balances
- Estate planning
- Asset protection
Buying Property With an SMSF
Did you know that a self-managed super fund also allows trustees to purchase business real property inside their super fund?
An SMSF allows trustees to purchase business real property inside their super fund and this can provide many tax benefits. Â If there is not enough money in the fund, a self-managed super fund can also borrow money from a financial institute to buy a property.
If you already own a commercial property, it may be worth considering contributing the property to the fund as a non-concessional contribution.
Owning a commercial property in a self-managed super fund provides a plethora of benefits. Â The commercial premises can be leased to the members for their business. Â This strategy allows the business to claim a tax deduction for the rent in their business while growing their superannuation for retirement.
SMSF FAQs
Who Can Have An SMSF?
Almost anyone can have an SMSF!
Being a member of an SMSF also means you are a trustee of the SMSF, or a Director of corporate trustee (a company). SMSF trustees need to declare that they:
- Have no prior convictions for offences in respect of dishonest conduct;
- Are not an insolvent under administration;
- Are not subject to a civil penalty order; and
- Are eligible to be a member of the SMSF.
How Much Money Do I Need To Start An SMSF?
There is no defined amount for an SMSF starting balance, rather the starting balance is one of a range of factors that needs to be considered before starting an SMSF.
The starting balance and any future balance changes are important when assessing the cost-effectiveness of an SMSF for your personal situation.
The SMSF Association found SMSFs with $200,000 or more can be competitive with industry and retail funds in terms of cost and performance.
Do I Need A Financial Adviser For An SMSF?
An SMSF financial adviser can provide advice in determining if an SMSF is suitable for your personal circumstances and provide ongoing advice to support your investment and personal goals as they change throughout the stages of your life.
An SMSF financial adviser assists you with making an informed decision based on your goals and objectives.
Who Can Provide SMSF Advice?
You can receive general or personal financial advice, including SMSF advice from a qualified and licensed financial adviser.
The team at Canny Advisory are here to help!
- General advice does not consider your personal situation or impact on the advice on you personally.
- Personal advice considers your personal situation and your goals, providing personalised advice in your best interests in a range of areas such as:
- Contributing to superannuation;
- Commencing an income stream (also known as a pension);
- Developing a retirement plan;
- Establishing and maintaining an investment strategy; and
- An option for year-round regular and ongoing advice.
Do I Need A Financial Adviser For An SMSF?
It is not mandatory to use a financial advisor to establish and maintain an SMSF.
While financial advisers aren’t required, an SMSF is not a ‘one size fits all’ type of superannuation fund so it is important to seek professional advice when setting up and running an SMSF to determine if an SMSF is appropriate for you.
Qualified and licensed financial advisers can help you set up your SMSF correctly and ensure you comply with all the rules.
How Much Does It Cost To Manage An SMSF?
Costs for SMSF can vary each year, depending on the professional services you engage to help support your management of the SMSF.
All SMSFs are required to pay an annual supervisory levy to the ATO and will need to pay for a yearly independent audit. Many SMSF trustees also pay for additional help in such areas as:
- Accounting services for the preparation of financial statements, annual returns and fund administration;
- Actuarial certificate fee, if the SMSF is paying an income stream;
- Financial advice services for personalised advice;
- Investing fees;
- Legal fees;
- Insurance policies for members; and
- Valuation fees for unlisted SMSF’s assets, such as real property.
This list is not exhaustive, and you may pay more fees in an SMSF than you would in another superannuation fund. Considering the advantages and costs of running an SMSF is an important step in your potential SMSF journey!
How We Can Help Set Up An SMSF
Whether you are considering establishing a self-managed super fund, already have one or you’re on the hunt for a new SMSF Accountant, our team at Canny Advisory offer individually tailored ongoing service packages to all of our SMSF clients.
With our advisory, accounting and legal teams all under one roof, we can assist you with your administrative, accounting, taxation and financial planning needs that coincide with your self-managed super fund. Â We can also assist you with estate planning, and retirement planning preparation when the time comes.Â
Want to know how to get started and what to do when setting up a self-managed super fund, as well as your investment options to your responsibilities? Are you a business owner that is looking at setting up an SMSF and possibly purchasing a business or property purchase?
Download our free guide to give yourself the best opportunity at a better more flexible future with you in control!
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