Recently, there has been a lot of talk surrounding Self-Managed Super Funds (SMSFs) and the benefits around funds of this nature. Before considering a SMSF, it’s important to know what SMSFs are about and if they are right for you. Fortis Accounting Partners provide superannuation services and are here to help you with your SMSF which are the fastest growing tax entity in the country.
According to the ATO, SMSFs are just like all other super funds and are a way of saving for your retirement. The difference however is that the members of a SMSF are also the trustees, this essentially means the members run it for their own benefit. The ATO is the regulator of SMSFs. SMSFs provide greater flexibility, investment choice, more control over your superannuation and are one of the most effective tax strategies available. However, SMSFs are not for everyone.
The ATO identifies there are three aspects to assist you with deciding if SMSFs are for you. Firstly, you should consider your options and seek professional advice. Most people do not have all the answers and superannuation knowledge so it’s best to talk to someone who knows the ins and outs. Fortis Accounting Partners are happy to talk you through your options and help you in deciding whether a SMSF is right for you. The next thing to consider is do you have enough assets, time and skills? To establish a competitive fund you need to have considerable savings to invest and you must be willing to put time and effort into managing the fund. During this time, you may also need to consult the professionals. Finally, you need to understand the risks and laws, all financial decisions carry risks so it’s essential to carefully think about your investment options to balance the level of risk against the level of financial return.
According to ASIC, when you run your own SMSF you must; carry out the role of trustee or director (this imposes legal duties on you), use the money only for retirement benefits, set and follow an investment strategy that ensures the fund is likely to meet your retirement needs and keep comprehensive records for annual audits by SMSF auditors.
ASIC also suggests if you are running a SMSF you will typically need: a large amount of money in the fund to make it worthwhile to cover upfront costs, you need to budget ongoing expenses such as professional accounting and tax etc, plenty of time to manage the fund, financial experience/skills and separate life insurance.
One of the most important questions to ask yourself when deciding if a SMSF is right for you is do you know enough? There are many legal responsibilities, tax implications and investment decisions that will need to be made. Although you can get help with these elements along the way, it’s essential you have a good understanding on them yourself.
In terms of the time commitment required there are reporting, record keeping and administration tasks that must be considered. As a trustee you need to; prepare accounts ensuring you value the fund’s assets at market value, appoint an approved SMSF auditor, prepare and lodge your SMSF annual return, lodge an accurate Rollover Benefits Statement and keep comprehensive records.
If you’re considering changing over to a SMSF, then come talk to us at Fortis Accounting Partners. We provide taxation advice on setting up a SMSF and assist clients in all facets of buying property within your SMSF. Please don’t hesitate to get in touch with the team on 02 9267 0108, or via info@exemplary-financial.flywheelsites.com.
