Get More Information On SMSF
SMSFs (Self-Managed Super Funds) are otherwise known as "Do It Yourself" (DIY) super funds. Just like other superannuation funds, SMSFs invest contributions made by members, offer benefits to members when they retire and offer death advantages to beneficiaries in the event of a member's death.
The major difference between a SMSF and other kinds of superannuation funds is that the members of a SMSF are also the trustees, or directors of a corporate trustee. This means they're required to prepare and institute an investment technique for their fund, accept contributions and handle the payment of benefits.
SMSFs even provide a broader investment option than other super funds, with options like direct property, managed investments and direct shares included. The members of a SMSF have to appoint approved auditors, and may also choose to involve taxation agents, accountants and financial advisors and administrators. However, the greatest legal responsibility for the fund's ongoing compliance rests with the individual trustees.
WHAT ARE THE REQUIREMENTS OF A SMSF?
• The major purpose of maintaining SMSF is to provide retirement benefits to member. Investments must be entered into with a view to achieving a commercial rate of return, not for life-style or private purposes
• A SMSF must have fewer than five members
• All members have to be trustees
• If your SMSF is a single member fund, you will have to appoint a company as trustee or a second individual to act as an individual trustee
• No member of the fund could be an associate of one more member of the fund, unless those members are related
• No trustee of the fund would be able to receive any remuneration for services as trustee
• A SMSF cannot lend money or give financial assistance to a member
• The SMSF can't acquire an asset from a member of the fund, or any other individual related to the trustee, with the exception of listed shares, managed funds, and business real property.
• SMSFs are prohibited from borrowing. There are few restricted exceptions.
• Trustees are required to set out the fund's objectives and to formulate an investment strategy to show how those objectives will be met. This has to be in writing and regularly reviewed.
WHAT ARE THE BENEFITS OF SMSFS? BENEFITS INCLUDE:
• Increased control over your retirement funds and how they are invested
• Wider investment choice than public offer funds
• Your SMSF could move with you from job to job, and from generation to generation
• Affords opportunities for estate planning and benefit payments
ARE THERE ANY KIND OF DOWNSIDES?
Drawbacks include:
• Each trustee bears a high degree of accountability to make sure all trustee duties are exercised in the very best interest of fund members
• There is a risk of tax penalties for non-compliance, so it is vital to have adequate knowledge and expertise
• Running a SMSF can be time consuming and demanding
• SMSFs incur a variety of additional costs, eg tax and regulatory return, administration, auditing of accounts, supervisory fees.
The major difference between a SMSF and other kinds of superannuation funds is that the members of a SMSF are also the trustees, or directors of a corporate trustee. This means they're required to prepare and institute an investment technique for their fund, accept contributions and handle the payment of benefits.
SMSFs even provide a broader investment option than other super funds, with options like direct property, managed investments and direct shares included. The members of a SMSF have to appoint approved auditors, and may also choose to involve taxation agents, accountants and financial advisors and administrators. However, the greatest legal responsibility for the fund's ongoing compliance rests with the individual trustees.
WHAT ARE THE REQUIREMENTS OF A SMSF?
• The major purpose of maintaining SMSF is to provide retirement benefits to member. Investments must be entered into with a view to achieving a commercial rate of return, not for life-style or private purposes
• A SMSF must have fewer than five members
• All members have to be trustees
• If your SMSF is a single member fund, you will have to appoint a company as trustee or a second individual to act as an individual trustee
• No member of the fund could be an associate of one more member of the fund, unless those members are related
• No trustee of the fund would be able to receive any remuneration for services as trustee
• A SMSF cannot lend money or give financial assistance to a member
• The SMSF can't acquire an asset from a member of the fund, or any other individual related to the trustee, with the exception of listed shares, managed funds, and business real property.
• SMSFs are prohibited from borrowing. There are few restricted exceptions.
• Trustees are required to set out the fund's objectives and to formulate an investment strategy to show how those objectives will be met. This has to be in writing and regularly reviewed.
WHAT ARE THE BENEFITS OF SMSFS? BENEFITS INCLUDE:
• Increased control over your retirement funds and how they are invested
• Wider investment choice than public offer funds
• Your SMSF could move with you from job to job, and from generation to generation
• Affords opportunities for estate planning and benefit payments
ARE THERE ANY KIND OF DOWNSIDES?
Drawbacks include:
• Each trustee bears a high degree of accountability to make sure all trustee duties are exercised in the very best interest of fund members
• There is a risk of tax penalties for non-compliance, so it is vital to have adequate knowledge and expertise
• Running a SMSF can be time consuming and demanding
• SMSFs incur a variety of additional costs, eg tax and regulatory return, administration, auditing of accounts, supervisory fees.
