Self-Managed Superannuation Funds
Get more out of your super
A healthy superannuation balance is a key to enjoying the lifestyle you deserve in retirement. Therefore, maximising the benefits you receive from your superannuation is crucial long-term. If you are dissatisfied with your current super fund, or want more control over your superannuation, get in touch with us and find out if a self-managed super fund is right for you.
Plan today, live tomorrow
What is an SMSF? How will it benefit me?
A Self-Managed Super Fund (SMSF) provides members with greater control over how their superannuation is handled in comparison to industry and retail super funds. This means you have more say in how your super is invested, a far wider scope of investment opportunities and strategies, and the flexibility of receiving retirement benefits including pensions and annuities directly from the fund.
Your retirement is something that you should start thinking about sooner rather than later. By planning early, you provide yourself with the best chance of retiring comfortably and enjoying the lifestyle you’ve worked hard for.
The establishment of a self-managed superannuation fund is normally only encouraged where it is evident that the value of the fund will be large enough to warrant the costs associated with the maintenance of such a fund.
The Australian Securities and Investments Commission (ASIC) recommends a minimum of $200,000 in assets or an expectation of achieving that amount quickly due to a high level of contributions. A Self-Managed Super Fund (SMSF) is a form of superannuation fund that is controlled by the members, giving greater control over their retirement savings than other types of superannuation funds such as industry or retail super funds. This includes wider investment choice and greater control over investments and flexibility in the payment of retirement benefits, such as pensions and annuities, directly from the fund. SMSFs must be established for the sole purpose of providing benefits to fund members on retirement. Or, if the member dies before retirement, a benefit to that member’s dependants. This is referred to as the Sole Purpose Test.
Our SMSF Services
SMSF Investment Strategy
Formulating an investment strategy for your SMSF is a crucial step in ensuring you are getting the most value possible out of your SMSF. Our team can work with a financial advisor of your choice, or get you in contact with one of our experienced associates to make sure you are on the right track once you retire.
In order to be a complying superannuation fund receiving the tax concessions, your fund has to meet the residency requirements.
If your fund is deemed non-complying, its assets and its income is taxed at the highest marginal rate.
SMSF Tax Returns & Tax Planning Advice
We provide the following services for your self-managed super fund to ensure you meet your compliance requirements of your SMSF.
- Preparing and lodging your SMSF’s annual income tax and regulatory returns
- Preparing your SMSF’s annual financial statements
What our clients are saying…
After moving interstate, I needed to find an accounting firm to deal with taxation returns for my self-managed super fund. I found AWT very prompt and professional to deal with. Audrey in particular was very kind. I would highly recommend AWT.
Friendly manner and personal approach
Our family are most fortunate to be associated with Audrey (since 2006) and Tamsin and Hayley (since AWT was established in 2010). I have watched the business grow into a highly professional and successful accounting practice. Your friendly manner and personal approach, with a full knowledge and understanding our family, SMSF and business financial affairs over the years, has made it easy to understand tax implications for all entities. My wife and I appreciate your continued and valued service and look forward to your ongoing success in the future.
To qualify as a resident superannuation fund, your fund has to pass the residency test which has three elements:
1. Your fund was established in Australia, or at least one of the fund’s assets is located in Australia.
2. The central management and control of your fund is ordinarily in Australia.
3. Your fund must either have no active members or have active members who are Australian residents who hold at least 50% of:
- the total market value of your fund’s assets attributable to super interests, or the sum of the amounts that would be payable to active members if they decided to leave the fund
Your fund is required to pass all three elements. For the central management of the fund, any departure from Australia on a permanent basis for any length of time will not meet this requirement, however a departure on a temporary basis for up to two years will meet this requirement. A member is considered active if:
- they are a contributor to the fund or
- contributions are being made to the fund on their behalf
A member is inactive if:
- they are no longer resident in Australia,
- they are not making contributions to the fund and
- any contributions made to the fund after they have ceased to be resident were in respect of the period in which they were Australian residents
SMSF Tax Returns & Tax Planning Advice
Depending on your individual situation, there can be a number of advantages of an SMSF.
These may include:
- Tailored tax management on investment income and capital gains
- Greater flexibility in investment choices and asset selection
- Control over your total investment portfolio, with the ability to take account of the risk profile of all your assets, including those held outside superannuation
- The ability to pool your resources with up to four fund members with similar financial objectives, such as family members
- Maximum flexibility in establishing and managing pensions, including account based, transition to retirement and pensions
- Greater flexibility for accessing Centrelink benefits such as the age pension
- Investing in direct property
- The ability to transfer personally owned listed shares, business real property and managed funds directly into your superannuation fund, and
- The ability to own business real property in your superannuation fund, to assist your business cashflow
Trustees must prepare and implement an investment strategy for their SMSF, which they must then give effect to and review regularly. The strategy should be reviewed at least annually, and you should document that you have undertaken this review and any decisions arising from the review. Certain significant events, such as a market correction, should also prompt a review of your strategy and may require updating your investment strategy.
If the assets of an SMSF or the level of investment in those assets fall outside of the scope of your investment strategy, you should take action to address that situation, which could involve adjustments to investments or updating your investment strategy. We don’t consider that short term variations to your articulated investment approach, including to specified asset allocations whilst you adjust your investments, constitute a variation from your investment strategy.
All investment decisions must be made in accordance with the investment strategy of the fund. If in doubt, trustees should seek investment advice.
An SMSF must be an Australian super fund to be a complying fund and receive concessional tax treatment.
To be an Australian super fund an SMSF must meet three residency conditions, see Check your fund is an Australian super fund. The second and third conditions are relevant in this case.
“The COVID-19 health crisis has resulted in many countries imposing travel bans and restrictions and a high degree of uncertainty generally around international travel.
If the individual trustees of an SMSF or directors of its corporate trustee are stranded overseas due to COVID-19, in the absence of any other changes in the SMSF or the trustees’ circumstances affecting the other conditions, we will not apply compliance resources to determine whether the SMSF meets the relevant residency conditions.”
The establishment of a self managed superannuation fund is normally only encouraged where it is evident that the value of the fund will be large enough to warrant the costs associated with the maintenance of such a fund. The Australian Securities and Investments Commission (ASIC) recommends a minimum of $200,000 in assets or an expectation of achieving that amount quickly due to a high level of contributions.
The cost of our services to assist in the setting up of a self-managed superannuation fund are between $900 – $2,000 (exclusive of GST). These services include:
- Discussions regarding the setting up of the fund
- Purchase of the Fund Deed
- Preparation of the documentation and minutes
- Application for Tax File Number and Australian Business Number with the Australian Tax Office
- Assisting with the setting up of bank accounts
In order to be a complying superannuation fund receiving the tax concessions, your fund has to meet the residency requirements. If your fund is deemed non-complying, its assets and its income is taxed at the highest marginal rate.
When setting up your superannuation fund, it is important to determine what structure you will use. All superannuation funds are trusts. As such, a decision needs to be made as to what type of trustee it will have, and this in turn will determine the requirements applicable to you. Your fund may have:
- A corporate trustee
- Individual trustees
- A single member
AWT Accountants will be able to provide information on the different structures.
The advantages of establishing your own self-managed superannuation fund include:
- Control over your own retirement fund including taking an active interest in the investing activities which are granted more flexibility in a self managed superannuation fund within the constraints of the rules relating to investments
- Where imputation credits are received by a self managed superannuation fund, the members receive the full benefit of these credits
- Members can defer the payment of contributions tax until it is actually payable by the fund, whereas in most managed funds, contributions tax is deducted on receipt of the contribution by that fund.
- Generally less expensive than managed funds for large superannuation interests where management fees are expressed as a percentage of the funds under management.
The disadvantages of establishing a self-managed superannuation fund include:
- Risk of non compliance where this could lead to tax being levied on the fund at a rate of 45% on the fund assets not the fund income
- The extensive responsibilities of the trustees of the fund including but not limited to ensuring that the fund complies with all the rules associated with maintaining a superannuation fund.
- The number of members of a self-managed superannuation fund is limited to 4.
- The cost of maintaining a self managed superannuation fund including the administrative requirements. These costs will vary according to the complexity of the fund. Factors used in determining the complexity of the fund are commonly (but not limited to):
- Structure of the fund – namely does it have corporate trustees or trustees who are individuals.
- Type of investments held by the fund
- Mode of the fund – this being whether or not it is in pension mode or accumulation mode or a combination of both
- Superannuation funds are subjected to an annual audit.
- Significant borrowing restrictions apply to self managed superannuation funds
For more information on how to best mitigate these risks, feel free to get in contact with us at AWT Accountants
All self-managed superannuation funds are regulated by the Australian Taxation Office. Self managed superannuation funds are required to undergo an annual audit by a current member of a recognised professional body who is in possession of a valid certificate of public practice. Recognised professional bodies include – but are not limited to – Chartered Accountants (C.A.s) and Certified Practising Accountants (C.P.A.s).
On finalisation of the superannuation accounts, we at AWT Accountants will arrange for your fund to have its annual audit and should queries arise from the auditor, we will assist you in clearing these queries as required in an efficient and timely manner.
This is dependent on the size and complexity of the fund in question. We at AWT Accountants usually charge between $1,200-$2,000 (exclusive of GST) for the administration and accounting of small non-complex funds. For the larger more complex funds this will be determined once we have ascertained the amount of work involved on a fund-by-fund basis.
We outsource the auditing of our funds and our auditor usually charges between $450 – $900 to perform his audit. Once again, this is dependent on the size and complexity of the fund.
The Australian Tax Office also charge every self managed superannuation fund an annual levy – currently $259.00
Call us today to set a time to discuss your taxation, business or SMSF needs
We offer new business and SMSF clients a complimentary 30-minute meeting to discuss your situation and how to best organise your business and tax accounting affairs.