Frequently Asked Questions

• SMSF’s give members unique control of their investments within the legal framework
• Maximum tax payable on earnings is 15 percent
• Tax is only payable in the year a gain is realised
• SMSFs allow control of the timing for asset disposal, meaning that realisation of gains can be deferred until such time that assets are supporting an Account Based Pension, when the income is taxed at 0%
• SMSF is a prerequisite for an Account Based Pension
• SMSFs can invest and borrow to acquire property

Some of the benefits of having a Corporate Trustee for the fund are:

• Majority of financial institutions will require an SMSF to have a Corporate Trustee to allow limited recourse borrowing arrangements. Please note that some lenders will not accept a trading company as a valid structure for an SMSF Corporate Trustee!
• SMSF with a Corporate Trustee will not require the name change for the assets held in bank, share trading or similar accounts in case of the membership/trusteeship changes.
• SMSFs with a Corporate Trustee only pay one penalty to the ATO in case of SIS Act breaches, in comparison with the individual trustees SMSFs, where each individual trustee is liable for the penalty and pays the full amount. For example: SMSF with 4 individual trustees penalized by the ATO with the maximum penalty of $10,200 means that all 4 trustees will individually have to pay $10,200 amounting to in total to $40,800 for the 4 trustees. SMSFs with a Corporate Trustee, is required to pay the maximum penalty of $10,200 in total, irrespective of the number of directors in the fund.

ASIC and the ATO recommend a minimum balance of $200,000 for a SMSF to be cost effective. But in some instances, funds below that balance may still work out in your favour. Your fund costs must be weighed up against potential returns.  Costs will depend on how much financial advice, investment management and accounting fees you pay for, compared to how much your fees would be in your existing retail or industry fund.

SMSF’s are often referred to as ‘DIY’ funds.  If you’re really serious about it, it is possible for you to do it all by yourself. However, before you make that decision, you need to ensure you’ve got the time, the ability and the knowledge to manage your own super. Many people find it hard enough keeping up with their current managed super funds.

You’ll need to prepare an investment strategy, select and then manage your investments well enough so they grow in value and meet your fund’s investment objectives. Potentially you may also need to insure some of your super fund assets.

You will also need to become a trustee of your own fund. Your fund must be correctly structured, and you’ll need to keep meticulous records to ensure you meet all reporting requirements (such as income tax and regulatory returns and reasonable benefit limits).

Yes. Residential property can be bought from an unrelated party, and commercial property from related or unrelated parties.

SMSF Trustees are responsible for:

• Annual Income Tax Returns & Other Lodgement Requirements
• Prepare and implement an Investment Strategy for the management of investments
• Annual Audit. All SMSFs are required to have the financial accounts and statements of the fund audited each year by an approved auditor. Auditors must provide a certificate to the trustees stating that the fund has been audited
• Reasonable Benefit Limits (RBL). All SMSFs are required to report payments of benefits made to members to the ATO
• Supervisory Levy. SMSFs must pay the annual superannuation supervisory levy to the ATO
• Record Keeping Requirements
• Keep accurate and accessible accounting records that explain the transactions and financial position of the fund
• Prepare an annual operating statement and an annual statement of the funds financial position and keep these records
• Prepare minutes of trustee meetings and decisions, records of all changes of trustees and members and keep these records for a minimum of 10 years
• Keep copies of all annual returns lodged for a minimum of 10 years
• Keep copies of all reports given to members for a minimum of 10 years

Think Super can assist your SMSF in meeting Annual administration requirements set forth by the ATO and specifically includes Special Purpose Financial Statements, including:

• Operating Statement
• Statement of Financial Position
• Notes to Accounts
• Members Statements
• Minutes of Trustee’s meeting
• Audit Report
• Income Tax Return