Self Managed Superannuation Funds, SMSF Advice
Like any other superannuation, a Self-Managed Superannuation Fund (SMSF) is a method for building up your savings to allow you to have a comfortable retirement. The main difference between SMSFs and other types of superannuation funds is that SMSFs are self-run – the members are also the trustees who administer the fund for their own benefit.
Under a SMSF setup structure you can combine the assets of yourself and up to three other trustees to give your investment some real earning power. If the fund consists of members of one family it can be used to pass wealth from one generation to the next with a minimum of tax liability coupled with maximum asset protection.
Benefits of a SMSF Setup
There are several benefits of setting up a SMSF include:
• The investment world can be quite intimidating and leave people feeling like they have no control over their financial security. A SMSF puts control back into the hands of the people whose money is being invested.
• In addition, most SMSFs use a flat-fee structure for contributions. Done right, this can lead to a great deal of cost savings as the fund’s balance grows. SMSFs also let you invest directly into residential and commercial properties as well as other asset classes.
• Like other superannuation funds, the earnings from SMSFs are taxed at 15%. That tax can be further reduced by utilising imputation credits (your own personal tax rate for the year – if your personal tax is lower than the 15% then you pay your personal tax rate instead). Any capital gains your SMSF makes that is held for longer than one year is taxed at 10%.
However, SMSFs are not always the best option. Plus, taking control also means spending time and effort being responsible for how the funds are invested and their performance over time. There are a number of legal responsibilities for the trustees involved.
Get expert SMSF advice
Setting up and managing a SMSF can be a complex process. The first step is to analyse your current financial situation to determine whether or not an SMSF is the best superannuation option for you. Contact us to find out if a SMSF is right for you. Offering you informative SMSF advice.