Everything You Need to Know About Self Managed Super Funds In Australia
Australian self-managed super funds (SMSF) are now the largest and growing segment of the super industry. For most Australians, super is the biggest, if not the ultimate investment they can have, hence people eye on keeping their super funds in a professionally managed super funds.
But for some, they want self-control for self-managed their money. Certainly, added control also comes with additional responsibility and tasks. Opting for SMSF is one major financial decision that requires your time and expertise to efficiently do it. Of course, you must have comprehensive skills in both financial and legal aspects. Time is vital here in researching and tracking of your super investments from time to time.
How Self Managed Super Funds In Australia works
Once you setup SMSF, you become a trustee of the fund, which means you’ll be responsible in managing your SMSF according to its trust deed and the rules regulate by the Australian Taxation Office (ATO). An SMSF can have one to four members and each member is a trustee.
Setting up SMSF can be quite complicated, but if you intend to, take these steps to determine if SMSF is right for you:
• Consider your options and seek professional advice
• Make sure you have enough assets, skills and time in managing your own fund
• Identify the super and tax laws as well as the risks
• Create a tailored trust deed and investment strategy suitable for other members of your fund
• Ensure you can keep up with record keeping and other related obligations
• Be aware of your annual auditing obligations and hire a qualified external auditor to conduct audit.
Managing Your Fund’s Investments
You must carefully manage your fund’s investments in the best interest of the fund members and in accordance with the law. Remember, your investment is separate from personal business affairs of all members, including you as well.
Accessing your Super Funds
Accessing the super in your SMSF to pay benefits is only allowed once the member has reached the “preservation age” and fulfills one specific condition before release, for example – they retire. Unlawful release of super benefits is subject to penalties by the regulating body.
Think twice on your decision
If you are thinking about setting up a self managed super fund in Australia, you must do your research and understand the concept of SMSF and your obligations. Since this is can be your biggest financial decision, it is best to consult with a qualified and licensed professional who will assist you in the process.