Self Managed Super Fund Services

What are the advantages?

In a Self-Managed Superannuation Fund ("SMSF"), you set up and, most important, manage and control your own Super fund in order to maximise and control your retirement benefits. Hence, a SMSF gives you maximum control over your superannuation assets and the flexibiility to tailor an investmentr strategy exactly suited to your individuals needs. Using a SMSF makes it easier to intregrate your superannuation into your overall investment and retirement planning. By adding family members to your SMSF, you are able to pool your super to enable you to invest more effectively.

Investing via a SMSF aslo has significant tax advantages. By investing through your super you are able to take advantage of:

  • The concessional 15 per cent tax rate on earnings and contributions claimed as a tax deduction by you personally or by your business;
  • The effective 10 per cent tax rate on capital gains made on investments held for more than twelve months;
  • Rebates on contributions made on behalf of a spouse;
  • A concessionally taxed end benefit;
  • Paying Life Insurance premiums through your SMSF (which are generally tax dedeuctible to the Super fund.)

What can my SMSF invest in?

A SMSF is able to invest in most assets, similar to any other investor. Shares, commercial property, property syndicates, developments, residential property, managed funds, bonds, cash on deposit, mortgages and term deposits are some examples.

Your SMSF must invest for the sole purpose of providing for your retirement. Existing investment rules mean that the fund is unable to:

  • Make loans or give financial assistance to members or relatives;
  • Acquire assets from related parties; or
  • Borrowing by the fund and providing finance to a related employer.

Further investment examples are artwork, antiques and other collectible assets, as long as they provide for the retirement of the members.

Existing legislation requires that all financial transactions occur as they would if they were being conducted at arms length. The appropriateness of SMSF investments is now a key area of regulation, and the investments of a SMSF must consider the needs of the Fund's members and their Risk Profile.

Legislation has been passed to prevent people from putting inappropriate investments into their SMSF to avoid paying their marginal rate of tax on investment earnings. Inappropriate investments may include purchase of equipment for leasing back to the business, for example, a dentisit leasing chairs and equipment from a SMSF would in our opinion not be providing for retirement benefits.

Government legislation limits Super funds from having more than 5 per cent of the market value of the funds assets invested 'in-house' assets. The major exception is where a fund acquires premises used for business purposes. This may mean that a SMSF may invest in commercial, industrial or retail property. 'In-house' includes:

  • Investments in related parties, including geared private unit trusts; and/or
  • Investments in related parties, for example, leasing a holiday house back to members of the Super fund.
Can my SMSF acquire my business premises?

Yes. Goverment legislation has removed restrictions that limited your SMSF ability ti acquire your business premises. Your Super fund can now acquire your business premises at market value.

Who should have a SMSF?

SMSFs offer many advantages to small business owners and high net worth individuals. In our experience, SMSF are most cost effective when assets in te fund exceed $50,000. The ongoing management and administration costs are at least $1,000 per annum. In Australia, the average fund has $280,000 in assets and the average holding of each member is approximately $130,000.

A SMSF is best suited to those people looking for maximum control over their Super assets and for those who are prepared to accept the responsibility of being trustee and work at managing the investment. Generally, someone who is willing to take control of their Super and their retirement aseets.

Using a SMSF in your over-all investment strategy

A SMSF may, due to its tax advantage status, enable you to undertake different strategies outside of Super. Super may be invested in capital growth oriented assets to utilise the 10 per cent Capital Gains Tax concession while investing in income providing assets to assist your current needs. Using a personal gearing strategy (outside of your Super fund) can further enhance this approach. By using a gearing strategy you may receive a full tax deduction on the interest you pay and are only taxed 50 per cent of the nominal gain of the assets are held for twelve months or more.

What do I have to do on a regular basis to run my own fund?

Each year you are required to:

  • Ensure your fund is complying and entitled to the tax concessions that apply;
  • Lodge a combined compliance return and income tax return with the ATO;
  • Keep records in a professional manner, and;
  • Adhere ti reporting requirements to avoid any loss of the funds concessionally taxed status.

AustAsia Accounting Services have expertise in meeting the administration requirements of SMSFs. We are able to assist you to meet your obligations and requirements. The Superannuation Industry (Supervision) Act governs your responsibilities as a trustee. Your key reponsibility is to provide retirement benefits for members. This usually involves formulating and giving effect to a written investment strategy that considers risk control, diversification and the profile and ages of members of the fund.

Key questions you may need to ask yourself before acquiring an investment for your SMSF are:

  • Is the investment for the sole purpose of providing for my retirement?
  • Is the investment consistent with my investment strategy?
  • Does the investment breach any of the investment standards?
  • Does the investment portfolio meet the needs and Risk Profile of the Fund's members?

AustAsia Accounting Services are able to assist in developing investment strategies that meet the legislative requirements. AustAsia Financial Planning can assist you to source suitable investments for your SMSF, including property syndicates, managed funds, commercial property, shares and other investments.

What are the restrictions?

The law requires a SMSF to have less than five members and that all members must be trustees or directors of a corporate trustee. No member of the fund can be an employee of another member of the fund unless the members concerned are relatives.

An arm's length employee of a company, which contributes to the SMSF (in respect of its controllers), cannot be a member of the same fund as the controllers of the company.

Using a SMSF in your over-all investment strategy

A SMSF may, due to its tax advantage status, enable you to undertake different strategies outside of Super. Super may be invested in capital growth oriented assets to utilise the 10 per cent Capital Gains Tax concession while investing in income providing assets to assist your current needs. Using a personal gearing strategy (outside of your Super fund) can further enhance this approach. By using a gearing strategy you may receive a full tax deduction on the interest you pay and are only taxed 50 per cent of the nominal gain of the assets are held for twelve months or more.

How do I establish a SMSF?

AustAsia Accounting Services provide you with a solicitor approved trust deed that takes into consideration your needs and those of any other member of your SMSF. All parties involved must sign the trust deed. AustAsia Accounting Services will also supply you with an election notice form, which you need to lodge with the Australian Taxation Office (ATO) in order to be treated as a complying fund. The ATO will provide the fund with a tax file number and an Australian Business Number.

How can AustAsia help you?

Through AustAsia Accounting Servcies and AustAsia Financial Planning, AustAsia can assist you to develop your investment strategy, in order to satisfy the investment requirements governing SMSFs. We are able to assist in restructuring your business affairs so that you may hold your business premises in your super fund, invest in managed funds (include share, bond, property and cash funds and a range of diversified funds) property syndictaes, direct shares and a variety of other investments. They can compliment your existing investments or form the core of your super fund.

AustAsia Financial Planning holds an Australian Financial Service License issued by the Australian Securities and Investment Commission. We are licensed, qualified, and experienced in recommending and implementing Superannuation and Investment straegies.

AustAsia Accounting Services is a registered tax agent, and is experienced and qualified to help you meet the legal requirements of a SMSF including record keeping, preparation of annual reports for the fund, and attending to the legislative requirements of auditing, tax returns and the compliance return.


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