Self-managed super funds (SMSFs) are a way of saving for your retirement. The difference between an SMSF and other types of funds is that, generally, the members of an SMSF are also the trustees. This means the members of the SMSF run it for their own benefit. The Australian Taxation Office is the regulator of SMSFs.
Darren Ricardo – one of JPR Business Group’s directors, has undertaken the required study and is now appropriately licenced as an Authorised Representative under SMSF Advisers Network Pty Ltd and is licensed to give you advice around the establishment (or closure) of an SMSF, as well as a comprehensive range of strategies when it comes to your super; ie making superannuation contributions or moving into pension phase, as these are considered a financial product.
The provision of this advice is heavily regulated and requires the adviser to provide this advice in the form of a Statement of Advice (SOA). Invoicing for the provision of this Superannuation advice will be undertaken through our licensee – SMSF Advisers Network Pty Ltd.
Thinking about self-managed super
SMSFs are not for everyone, you will need to obtain the appropriate advice to you before deciding to set up a SMSF. It is a major financial decision and you need to have the time and skills to do it. There may be better options for your superannuation savings.
Setting up an SMSF
When you set up an SMSF, you become a trustee of the fund (or a director of a company that is a trustee). In either case, you will be responsible for managing the SMSF according to its trust deed and the laws and rules that apply to SMSFs. The key principle is that you run your SMSF for the sole purpose of providing retirement benefits to members.
Managing your fund’s investments
You need to manage your fund’s investments in the best interests of fund members and in accordance with the law. The SMSF's investments must be separate from the personal and business affairs of fund members, including your own.
As an SMSF trustee, you can accept money contributions for your members from various sources but there are some restrictions, mostly depending on the member’s age and the contribution caps. Generally, you cannot accept an asset as a contribution from a member, though there are some exceptions.
Reporting, record keeping and administration
As a trustee, you will have a number of administrative obligations – for example, you will need to arrange an annual audit of your fund, keep appropriate records and report to the tax office on the fund’s operation.
Accessing your superannuation
When paying benefits, your SMSF generally can only pay a member's superannuation when the member reaches their ‘preservation age’ and meets one of the specified conditions of release – for example, they retire. There are very limited circumstances, such as death or a terminal medical condition, where a member’s superannuation can be accessed before this. There are significant penalties for unlawfully releasing superannuation benefits.
Understanding tax and SMSFs
The income of your SMSF is generally taxed at a concessional rate of 15%. To be entitled to this rate, your fund must be a ‘complying fund’ that follows the laws and rules for SMSFs.
Cannot view the file? Click here to download Adobe Reader for free