Is SMSF right for me?
SMSFs are generally more cost effective once the members' combined resources reach $200,000. They are suitable for investors looking for control over their superannuation assets. SMSF's are not for everyone, and you must be sure you understand your responsibilities before you go ahead and set one up.
Having an SMSF brings responsibilities for the Trustees to ensure the SMSF complies with legislation.
- an SMSF must have an investment strategy which is to be adhered to when making investment decisions
- the fund must lodge an audited annual return with the tax office every year
- the fund must have a trustee appointed who will carry out the decisions in the best interests of the members and;
- the assets of the SMSF must be separate from your personal assets.
Powers will evaluate with you to determine if having an SMSF is right for you. Setting up an SMSF for the wrong reasons is of no benefit to anyone.
Find out if an SMSF is right for you!
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Auditing
An SMSF must be audited by a suitably qualified Auditor on an annual basis. The auditor must ensure that the SMSF has adhered to the SIS Act in all of its operations. The audit of the Fund is in accordance with guidelines prepared by the ATO and professional accounting bodies such as the Institute of Chartered Accountants or Certified Practicing Accountants.
The audit of the fund is relied upon particularly by the ATO in the first instance to ensure that the SMSF has acted in accordance with the SIS Act.
The audit of the Fund ensures;
- assets of the Fund are in the Trustees' name,
- loans have not been made to members of the Fund,
- contributions have been recorded correctly to the members,
- investments have been made that form part of the investment strategy and;
- trustee decisions have been minuted.
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Forms to Download
If you decided that an SMSF is right for you, follow the appropriate link to access our online forms;
Powers will then use this information and work with you to establish your SMSF.
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Benefits of having an SMSF
Everyone has different motives for their choice of retirement vehicles. This choice provides Australians with enormous power when selecting where to hold their superannuation assets. While there are many benefits to using an SMSF as your preferred retirement vehicle, the ultimate decision as to whether a SMSF is right for you should be your own decision.
Some of the key issues for someone considering whether a SMSF is right for them:
- Control - Do you want the ability to control the choice of investments for your superannuation?
- Flexibility - Do you want the flexibility and freedom of choice of maintaining your own personal superannuation fund?
- Cost savings - Do you have sufficient money in superannuation to take advantage of the cost savings associated with running a SMSF?
- Family super fund - Are you attracted to having a family retirement fund for you and your spouse and potentially the next generation?
- Trustee responsibilities - Are you prepared to take on the responsibility for maintaining the SMSF for the sole purpose of providing for the retirement of the members?
- Ongoing involvement - Are you prepared to invest the time to regularly review the operations of your SMSF, including the investment performance?
Want to know more about the benefits of having an SMSF?
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Legislation
SMSFs are regulated by the Australian Tax Office in accordance with the Superannuation Industry Supervision Act 1993 and subsequent regulations which are the bible for Superannuation Funds. There are over 400,000 SMSFs regulated by the ATO in accordance with SIS (Superannuation Industry Supervision Act 1993) which is the bible for all Superannuation Funds.
The ATO uses a number of reporting mechanisms, such as annual lodgements, reviews and audits to ensure that there is adherence to the SIS Act by all SMSFs. Where breaches are identified the ATO will put in place different measures to ensure that the breach is rectified and does not happen again. The ultimate power of the ATO is to disqualify the trustees of the fund and make the SMSF non-complying. A non-complying fund is taxed at 46.5% on the asset value of the fund. This only happens if there are persistent breaches of the SIS Act.
Powers will ensure that Trustees are aware of all their responsibilities and where a breach has happened, we will put in place arrangements to ensure the breach is rectified to the satisfaction of the Australian Tax Office.
Read the latest updates to legislation here
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