Take control of the new super rules with a self managed fund

Self managed super funds are becoming increasingly popular offering you control, flexibility and investment choice. However, there are important obligations that come with managing your own super so if you're thinking of starting your own fund, make sure you discuss your options in detail with a fina

What is an SMSF?

An SMSF is a trust where money or assets are held and managed on behalf of up to four members. In most cases, all members of an SMSF must be trustees of the fund or directors of the fund's corporate trustee. The Superannuation Industry (Supervision) Act 1993 and Regulations (SIS) and related legislation govern Australian super funds and the Australian Taxation Office (ATO) and Australian Securities and Investments Commission (ASIC) are responsible for overseeing the regulation of SMSFs.

Why establish an SMSF?

As the trustee of the fund, you have complete control over your investment strategy and the flexibility to decide on the type of investments you make. Additionally, like all super funds, an SMSF receives concessional tax treatment. For example, the income of a complying SMSF is generally taxed at 15%. For a non-complying SMSF the highest marginal tax rate would apply.

Understanding the rules and obligations of an SMSF

While there are benefits in establishing an SMSF, running your own fund is complex and there are many things you have to consider, including:

  • your investment strategy - setting it and regularly reviewing it
  • the administration of your fund - completing all the paperwork correctly and on time
  • compliance with super and other laws - and there's a lot of them.

In fact, many people who choose self managed super use a specialist SMSF administrator to undertake the onerous compliance activities. This allows them to enjoy the benefits of investment control and flexibility without as much paperwork.

Your fund's compliance with super laws is essential and you're legally responsible for making sure your fund complies with all the rules - even if you pay for professional advice and/or administration. While the ATO’s regulatory approach to SMSFs has been focused on education and information, it's fast becoming more aggressive in its position on fund compliance.

Want more information?

Would you like to know if a self-managed superannuation fund is right for you? Contact Robert, Michael or Fred here at CPB for an obligation free discussion.ncial adviser.