Self-Managed Super Funds ("SMSF") are superannuation
funds managed by 4 or less members. SMSF Members are usually
Trustees or Directors of a company where a corporate Trustee is
used. SMSF's are used by families, close friends or business
associates who wish to retain control of the Fund and decide how to
manage its assets.
What decisions can the Trustees of an SMSF
Trustees of SMSF's can decide how to invest the assets of
the Fund, formulate members' retirement strategies and pensions
and determine details of the Trust Deed. It is advisable for
Trustees to engage professionals such as auditors, accountants,
lawyers and financial advisors to help discharge these duties.
Benefits of an SMSF
There are a number of benefits to having an SMSF, including:
Greater Investment Choice:
SMSF Members can choose to invest in a wider range of
investments such as property, direct shares and overseas assets.
However, when doing so, members must make sure that they comply
with the relevant superannuation legislation and regulations.
SMSF's provide a way to look after your spouse and children
when you die. SMSF's are a tax-effective means of providing
income payments or payments to a member's family upon their
death. As state planning strategies are separate from members'
Wills, tax concessions can be made. This also protects the estate
of the Deceased from legal challenges and the clause of the NSW
Guardian and Trustee.
SMSF's provide an added advantage over retail funds as
members can choose how to manage their tax liabilities. Strategies
to limit tax include selecting investments such as high-franking
dividend stocks and transferring assets to the tax-free pension
phase of an SMSF.
Administrative and reporting costs can be cut by managing SMSF
assets yourself. These savings are amplified for larger funds.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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