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Like other super funds such as retail and industry funds, SMSFs are a way of saving for your retirement. SMSFs are different to retail and industry super funds because they’re run by you, so you can invest, manage and build your retirement savings as you choose – taking control of your own retirement savings.

SMSFs offer more control over your money; you make the key decisions around where to invest. You also benefit from flexibility and choice, you construct your fund‚ investment strategy and enjoy more investment options.

SMSFs offer potential tax advantages, depending on your personal circumstances and investment strategy, and you can also pool your super with family or other fund members to create cost savings.

  • Firstly seek independent professional advice to find out if setting up a SMSF is appropriate for your circumstances, then:
  • Choose your SMSF members
  • Choose your SMSF structure ‚ every member must be either an individual trustee or a director of a corporate trustee
  • Set up your SMSF ‚ the deed should be written so it complies with superannuation legislation
  • Apply for an Australian Business Number and register with the ATO
  • Set up a bank account specifically for the SMSF
  • Create an investment strategy

Anyone can set up a SMSF providing you are over the age of 18. There can be no more than four members of a SMSF, and you can set up a fund with your spouse, partner, adult children, other relatives or family
members, friends, colleagues or a combination of all the above.

SMSF investment portfolios can include many of the following investments:

  • Cash management accounts
  • Term deposits
  • Residential property
  • Commercial property
  • Industrial property
  • Property purchased with borrowed funds (limited recourse borrowing)
  • Property partnerships with non-related parties
  • Managed funds (Australian and international)
  • Listed Australian shares
  • Listed unit trusts (property, investment)
  • Listed investment companies
  • Overseas listed shares

Most people we speak to prefer to invest in property, as opposed to the share market, given the perception that the property market is less volatile‚ ultimately if the clients want to invest in property using their superannuation savings, they must set up an SMSF.

The benefits are:

  • Asset protection
  • Significant tax efficiencies
  • Potential to benefit from negative gearing inside the SMSF environment
  • No Capital Gains Tax (CGT) paid when disposing of the property once the member(s) retire (when the asset is sole in the pension phase).

The Australian Securities & Investment Commission (ASIC) guidance suggests an existing superannuation savings balance of $200,000 to start an SMSF. This includes the superannuation assets of all members, for example the combined existing superannuation balances of a husband and wife needs to be at least $200,000.

Yes, most people can now instruct their employer to pay their super contributions into a SMSF. If you change employers, you can instruct your new employer to pay into your SMSF.

An SMSF can accept the exact same types of super contributions as a retail or industry super fund:

  • Voluntary contributions, eg salary sacrifice and non-concessional contributions
  • Rollovers or transfers from your existing superannuation funds
  • Spouse contributions
  • Co-contributions