What is a SMSF?
- A small Self Managed Superannuation Fund established for 1 to 4 members who want to grow and manage their future wealth by creating their own super fund.
- Each member is a trustee of the fund, or for a corporate trustee, all members of the fund are directors of the trustee company
- No member of the fund is an employee of another member of the fund, unless they are related
- The key things to remember are:
- The money in an SMSF is held in trust for the members of the fund.
- An SMSF and its assets are controlled by trustees.
- The fund must be run in accordance with the legislation.
- The fund receives contributions and rollovers and the trustees decide how the money is invested.
- When a member is allowed to access their super, the trustees pay money as a lump sum or as a pension.
Why would you want a Self Managed Superannuation Fund?
Acknowledged as one of the most tax effective structures for wealth creation, SMSFs offer a number of key benefits, including:
- Control over the structure and all decisions made by fund.
- Flexibility of investment choice, timing of contributions and access to income stream (pension) payments.
- Tax effectiveness opportunity to reduce tax rates on investment income and capital gains through the use of franking credits, offsetting capital losses, timing of disposal of assets and other capital gains considerations.
- Estate planning SMSFs can be structured to provide effective estate planning.
- Asset ownership ability to transfer personal shares and business real property into the fund.
- Asset protection from bankruptcy and other legal claims (up to a limit).
What is Limited Recourse Borrowing via Self Managed Superannuation Funds?
- Money borrowed is used to acquire a single asset or group of identical assets.
- Acquired asset is held in trust and SMSF receives beneficial interest and right to acquire legal ownership by making one or more payments.
- The lender and/or any other person has limited recourse against the SMSF trustee and the amount that can be recovered is limited to the value of the acquirable asset.
- The asset is one that can be acquired by the SMSF.
- Pooling assets and having the right estate plan for retirement can have significant tax and investment benefits.
To experience the true advantages of a Self Managed Superannuation Funds, call today on 1300 850 902 and talk with a friendly Self Managed Superannuation Fund Specialist for the best and up to date method for setting up your self-managed super.