Self-Managed Superannuation Funds (SMSF)

June 12, 2013

Gotsis Accounting can assist you with your Self-Managed Super Funds (SMSFs), as we have helped many of our clients. This includes establishment, registration and compliance of SMSFs as well as acquisition of property and investment strategies. To start with, below is some information on their benefits and compliance which will help you.

As Superannuation is now among the largest asset of many Australians, you may decide to manage this critical investment yourself through the use of a Self Managed Superannuation Funds (SMSF).  As a result, SMSFs is one of the largest and fastest growing sector of the superannuation industry.

If you are a trustee of a SMSF, managing your own fund and making sure that you undertake this correctly and in line with the many rules and regulations that govern superannuation is critical.

SMSF Compliance
While you and other members of your SMSF now have the opportunity to manage your retirement savings, as a trustee you are ultimately responsible for running the fund and complying with superannuation and tax laws. You must ensure that:

  • a documented strategy exists
  • the fund meets its investment strategy (make sure you consider risk, return, diversification and the ability of the fund to make payments as needed)
  • the fund adheres to the sole purpose test
  • no benefits have been paid out prior to the retirement of members
  • investments are at arms length and appropriate to the fund
  • the fund is meeting its compliance and reporting obligations

SMSF Benefits
This said, SMSF provides many great benefits including:

  • You can choose where you wish to invest to achieve the best returns. This enables you to invest in property, direct shares, wholesale managed funds and derivatives.
  • A reduced tax rate with 15% being the maximum payable on contributions and earnings in a SMSF.  However, in the 2012/13 Federal Budget, the government announced that from 1 July 2012, individuals with income greater than $300,000 (including employer superannuation contributions) will have their concessional contributions taxed at 30% rather than 15%.
  • Imputation credits on dividends received can reduce the overall tax to be paid, excess credits are refundable.
  • SMSF are now able to buy business real property which can be leased out to the family business.
  • Earnings of an SMSF used to pay a pension is not taxable to the SMSF, provided the eligibility conditions are met.
  • Your assets can be rolled over into a pension on retirement and there will be 0% tax on any capital gains made by the SMSF on those assets.

Draw a pension from your superfund on retirement and receive valuable tax concessions.