Talking to a Sedley Koschel Financial Planning professional will provide you with a clearer picture on what is the best solution for your SMSF.
As the Australian Government encourages everyone to take responsibility for and reach individual financial retirement goals, more importance is placed on securing our own Superannuation.
A Self Managed Superannuation Fund (SMSF) is a specialised retirement savings plan, used to accumulate superannuation monies for the retirement benefits of its members and is one of the best means of saving for retirement. SMSF allows you to steer your own investment strategy, reduce tax while obtaining tax benefits and minimising administration costs.
Self Managed Superannuation Funds are now among the most popular type of fund within the superannuation industry in Australia – with far better performance results than retail and industry funds. With more than a million Australians now enjoying a combined asset pool of $550 billion, the increasing popularity of SMSFs is well founded.
Benefits of SMSFs
A Self Managed Superannuation Fund (SMSF) is a specialised retirement savings plan used to accumulate superannuation monies for the retirement benefits of its members. Self Managed Superannuation Funds (SMSF) are now among most popular type of fund within the superannuation industry in Australia and have grown in popularity due to numerous advantages over traditional industry or retail superannuation funds such as:
- Increased Control – Greater control over how the fund’s assets are invested. The ability to control their superannuation interests is a major factor for individuals looking to establish their own SMSF.
- Added Options – The ability to invest directly into residential and commercial property. Trustees are able to invest in assets of their choice and recover excess franking credits from the Australian Taxation Office each financial year.
- Borrowing – The possibility of borrowing funds in your SMSF for property or other investments.
- Flexibility – Ability to pool your funds with family members, and flexibility when transitioning into retirement.
- Taxation Benefits – SMSF’s also have the capacity to cater for various tax advantages and in a lot of cases, the real possibly of lower running costs and greater risk management.
Sedley Koschel Wealth can assist with both the set up and ongoing administration of your SMSF.
Not sure if SMSF is for you? Are you currently in a retail super scheme and not sure how it is comparing?
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Setting up a Fund
It is important to set up your SMSF properly so that it’s eligible for tax concessions and easier to manage once up and running. You’ll need to find an SMSF expert to help you with the initial set up. Choose a firm that is a member of the SMSF Association of Australia to take you through the ATO requirements.
Need help setting up your own SMSF?
The team at Sedley Koschel Superannuation have years of combined experience specifically with the set up and ongoing management of SMSFs. Director, Robert Koschel holds the highest accreditation with the SMSF Association of Australia. Our Superannuation admin team can quickly and efficiently set up your SMSF and assist with all of your paperwork. We will guide you through the entire process and then provide ongoing support and assistance;
- Implementing SMSF structures,
- Liaison with ATO and all correspondence,
- Preparation of trustees’ minutes,
- Preparation of year-end financial statements,
- Preparation and lodgement the fund’s annual income tax and regulatory return,
- Preparation of an annual actuarial certificate,
- Managing the annual independent audit of your SMSF.
Laws & Rules
SMSFs operate in the same way as any other superannuation fund however with SMSFs, the responsibility of managing the fund rests with the trustee. With an SMSF, you can be both a member and a trustee, therefore establishing an SMSF can be a major decision and process. With this control comes greater obligation and risk. It is strongly advised that trustees should either set aside ample time to run their fund, or appoint an SMSF specialist to assist them in the ongoing administration, compliance requirements and investment implementation.
Do you need to be qualified to set up an SMSF?
It is always important to seek professional advice with any type of investment plan for retirement or wealth creation. Partner and Head of the Sedley Koschel Superannuation division; Robert Koschel is a qualified SMSF Specialist and holds accreditation with the SMSF Association of Australia. Robert is happy to field any questions you might have in regards to SMSF.
There are several trust laws and legislative requirements for setting up a self-managed superannuation fund (SMSF). Typically you need to:
- Obtain a trust deed
- Appoint trustees
- Sign a trustee declaration (NAT 71089)
- Elect to become a regulated fund
- Obtain a tax file number (TFN)
- Obtain an Australian business number (ABN)
Other points to consider;
- There are costs associated with managing an SMSF and it does take time and knowledge to set up and manage.
- There are many rules regulating SMSFs with hefty penalties imposed for breaches of these.
- Legal documents must be drawn and plans formalised for the possible death or permanent injury of a key contributing member.
Superannuation law is a delicate area and personalised planning is required for each individual. Seek advice from an independent planner who is an approved member of the SMSF Association of Australia before establishing an SMSF.
Buying Property within SMSF
Want to find out the rules for buying property through your Super fund?
Australians have long loved real-estate ownership. So it is no surprise that property has evolved as a preferred investment asset of self-managed superannuation funds.
There are numerous tax advantages for holding property within SMSF. You can purchase residential and commercial property inside your superannuation fund and for business owners, the ability to transfer property that is used exclusively in one or more businesses to their family superannuation fund. Further benefits include much greater protection and transfer of assets held within SMSF. Fund members can also take advantage of potentially higher and ongoing income in retirement.
There are also complicated rules associated with borrowing to invest in residential or commercial property within your superannuation (or Limited Recourse Borrowing Arrangements LRBA’s). You must factor these borrowing arrangement into your SMSF Property Investment plan. Failure to do so can be very costly.
It is therefore advisable to speak with your Accountant and Financial Planner before searching for a suitable investment property or arranging any type of finance. It is important that you educate yourself on points relating to this investment strategy such as;
- Setting up your SMSF first, before transferring or purchasing an investment property.
- Ensuring each investment complies with your SMSF trust deed and the fund’s investment strategy.
- SMSF members may not purchase an investment property already owned by a member or a related party of the fund and nor can the investment property be rented to SMSF members or their relatives.
Sedley Koschel Superannuation is part of an award winning accounting and financial planning firm who specialise in tax minimisation, wealth creation, protection and asset transfer. We only work with Finance and Home Loan providers who specialise in SMSF borrowing arrangements.
Sedley Koschel Wealth Disclaimer
Sedley Koschel Wealth Pty Ltd is a Corporate Authorised Representative (No.326979) ABN 60 082 422 320 of Professional Investment Services Pty Ltd.
Robert Koschel is a sub authorised representative (ARN 244979) of Sedley Koschel Wealth Pty Ltd.
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GENERAL ADVICE WARNING
The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Professional Investment Services (PIS) Authorised Representative before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Professional Investment Services nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.