Looking for more control over your financial future?
We know the requirements of running a Self Managed Super Fund
Over one million Australians have chosen to have their own self managed super fund (SMSF). Many of our clients have found that a SMSF has given them more control and visibility over their investments in order to meet their retirement goals.
While there are advantages in using a SMSF, there are also many obligations that you need to be aware of. You need to comply with strict rules, complex legislation and frequent changes. And if you get it wrong along the way there are significant penalties.
Our accountants have extensive experience in the tax and compliance issues specific to self managed super funds.
With expert guidance, you’ll have peace of mind that you’re ticking all the right boxes and avoiding any risk of non-compliance. Read our case studies to find out how we’ve been able to help our SMSF clients.
Clients Rob and Susie had recently retired at the age of 65 years and had approximately $1,000,000 each in their self managed superannuation fund. Fortunately, leading up to this day, they’d had specific advice from their financial planner to ensure they had enough money to retire.
Good news: as their SMSF was 100% in pension phase, there is no income tax on any investment earnings.
They provided us with their documented financial planning and investment strategy and couldn’t be happier.
We set up a system that automatically captured a lot of the paperwork that we needed to complete the financial statements, tax returns and requirements of the independent auditor. No more posting paperwork to us.
Rob and Susie are very comfortable that they have advisers to look after their superannuation interests and to ensure it all complies with taxation and superannuation legislation. This means that they can travel the country and enjoy their retirement.
John and Carol received a letter from the ATO advising that they had a high concentration in an asset class – in their case, property.
The superannuation legislation requires an investment strategy to be in place. Their financial planner had already prepared an investment strategy that considered the following matters which form part of a compliant investment strategy:
- diversification
- the risks associated with inadequate diversification
- how the likely return from their investments measures up to their retirement objectives
- the liquidity (cashflow) of their investments, and
- member insurance needs
We also confirmed with the SMSF auditor that the investment strategy would comply.
After our meeting, John and Carol had comfort that they were complying with the ATO rules. The cost of a non-compliant investment strategy may have resulted in an ATO administration penalty of $4,200 per trustee.
Self Managed Super Funds must have a trust deed to set out the rules of the fund. This deed, along with superannuation legislation, form the fund’s governing rules and dictate how the fund can operate.
Changes in superannuation legislation have a tendency to age SMSF trust deeds. If your deed was written a long time ago, or wasn’t drafted well to begin with, you may find that it doesn’t allow you to do the things you want to do.
Which was the case with our client, Mark, who was approaching retirement age. He needed his SMSF to accommodate a new contribution strategy and have some flexibility with estate planning matters. He also wanted to take advantage of new legislation around income streams that his financial planner had recommended.
After a review of his deed we found that it fell short of Mark’s expectations and needed some enhancements, which our superannuation team were able to organise. Mark’s upgraded deed is modern, robust and flexible and will cater to his superannuation strategy and changes to legislation as they develop.
Clients Sam and Debbie, both in their early forties, had diversified investments in shares, some rental properties and their family home. They were keen to buy a commercial property and approached us to find out if it was possible to borrow through their existing SMSF.
We reviewed their trust deed and confirmed that it was possible to borrow through their SMSF.
We further explained that there would be quite a lot of legal documentation required to ensure compliance with the ATO and SIS legislation which would include, amongst other things, the setup of a Bare Trust for the borrowing.
We then suggested that Sam and Debbie obtain specific advice regarding their strategy from a licensed financial planner. They also had a meeting with their banker to understand their requirements.
This was not an easy process but at the end of the day, they found a great commercial property that met their retirement strategy goals.
If you are looking to borrow through a SMSF, it’s vital to obtain professional advice before signing a contract to ensure you understand the benefits, risks and costs associated with a SMSF.
Note: These are real case studies of clients we’ve worked with, though we have changed their names to protect their privacy.
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Self managed super fund services
If you’ve decided that a self managed super fund is the right choice for you, our specialist advisors will guide you through the establishment process and get to know your investment goals. Our goal is to make it easy for you and ensure you have a full understanding of how it all works.
Superannuation legislation is complex and changing. We provide Trustees with the security of knowing that your administration and compliance obligations are in the hands of highly skilled, specialist SMSF accountants.
Your SMSF trust deed, together with superannuation legislation, form the fund’s governing rules and dictate how the fund can operate. Our specialists can review existing deeds to make sure they accommodate changed legislation and allow for your investment choices.
It’s a legal requirement to have an investment strategy in place when you establish a SMSF. But it’s not a set-and-forget document. Your investment strategy will need to be regularly reviewed over the life of the fund to ensure it meets your objectives.
The rules around SMSF borrowing can be complex and are subject to change. Our advisors have over 20 years’ experience in SMSF legislation and can ensure your fund is compliant.
Estate Planning is more than simply having an up to date will, particularly when you have a SMSF. Our estate planning advisors ensure you have peace of mind that the assets you’ve so carefully accumulated pass to the right people and in the most tax effective way possible.
Our advisors engage in tax planning sessions with Self Managed Super Fund trustees each year to maximise the flexibility of the SMSF structure and minimise your tax position.
SMSF pension documentation needs to be consider legislative requirements, audit issues, and common law issues. So it’s important to get it right. We ensure your deeds and documents are up-to-date with regulatory requirements before and during the income stream phase.
