Self-Managed Super Funds

What is a Self-Managed Super Fund?

Self-Managed Super Funds, or SMSFs, are private superannuation funds that you manage yourself.

SMSFs are regulated by the Australian Taxation Office and can have up to four members – all of whom must be trustees and are responsible for decisions and compliance with laws.

SMSFs provide a range of flexible investment options and can offer significant tax benefits. However, they can be expensive to set up and run and require solid knowledge of legal and financial matters. SMSFs are most suited to individuals with large superannuation balances and who are prepared to accept the responsibility of running their own super fund.

How Do You Run a Self-Managed Super Fund?

SMSFs have many benefits, but they are not for the faint-hearted. They take significant time and effort to manage and come with a lot of responsibility.

While you can hire professionals to help you run an SFSF, ultimately you are legally responsible for it. So unless you have extensive knowledge of investments and legal matters, they are probably not suitable.

SMSFs operate under similar rules and restrictions as ordinary super funds.

Your roles responsibilities as the operator of an SMSF will include:

  • You will be the trustee (or director of a corporate trustee) of your SMSF. As trustee or director, you will have significant legal obligations
  • You will be required to establish and then manage your investment strategy, so it is important you have the financial experience and skills to make sound investment decisions
  • You will need the time and expertise to research investments
  • You will need to access professional accounting, tax, audit, legal and financial advice
  • You must keep comprehensive records and arrange an annual audit by an approved SMSF auditor
  • It is your responsibility to organise insurance, where appropriate and necessary,  including income protection insurance and total and permanent disability cover for all members of the SMSF

How Can You Invest Your Funds?

An SMSF gives you access to a broader range of investment options than a traditional superannuation fund.

So along with shares, property, managed funds and term deposits, you can also invest in collectibles and even cryptocurrencies.

An SMSF can invest in:

  • Shares
  • Property
  • A wide range of collectibles, including artwork, jewellery, vintage cars, antiques, coins and stamps
  • Cryptocurrencies, including Bitcoin, Ethereum and Litecoin.

A sobering note of caution, however. While an SMSF can hold collectibles, there are strict rules around how they are stored and used. For example, the collectibles must be insured in the name of the fund and they can’t provide a day-to-day benefit. That means you can’t drive your beautiful vintage car, or hang your artwork in your home – or indeed your business premises.

While you can hire professionals to help you run an SMSF, ultimately you are legally responsible for it. So unless you have extensive knowledge of investments and legal matters, they are probably not suitable.

 

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