• Home
  • About
  • Advertise
  • Contact
  • Policy
  • Guest Post
  • Archive

One Cent At A Time

A Personal finance blog to get rich

  • Email
  • Facebook
  • Pinterest
  • RSS
  • Twitter
  • Beautiful Life
  • Becoming Rich
  • Beginners Guide
  • Extra Income
  • Productivity
  • Saving Money

What You Need to Know About Self-Managed Superannuation Funds

March 15, 2013 1 Comment

Share this:

  • Tweet
  • Email

Self-managed super funds, or SMSFs, are one of the seven types of superannuation funds available to Australians. If you’re considering which type of super fund is best for you, be sure you know what SMSFs are all about.

Financial Advisor

When choosing your super fund, it pays to know your options. If you think a SMSF is for you, then make sure you get all the information about this popular type of superannuation fund that many Australians choose for their retirement and their financial future.

What is a SMSF?

A SMSF is a fund that allows you to manage your own superannuation investments. One of the main differences between a SMSF and other types of super funds is that the members of the fund are generally also the trustees of the fund. SMSFs require careful financial and investment planning and are not for everyone. They need to be accurately and actively managed in order to get the best return on your retirement investments.

Setting up a SMSF

When you choose to set up a SMSF you are the trustee of the fund. You take on the legal and financial responsibilities of the fund, running it in accordance with the Australian Tax Office (ATO). Among other things, this means the fund must be run separately from your own personal affairs. The ATO regulates all SMSFs to ensure trustees meet their legal obligations, duties and responsibilities. What the ATO does not do is offer financial advice regarding superannuation investments for your retirement.

As the trustee of your own SMSF, you are responsible for ensuring the fund runs according to Australian super laws and in accordance with the fund’s trust deed. The SMSF must be set up and administered in such a way as to be solely designed for the purpose of providing financial retirement benefits for its members.

When setting up your SMSF, there are 10 general steps to take to set up the fund. These are as follows:

  • Seek advice. Find a superannuation specialist who focuses on SMSFs to help you set up your fund.
  • Identify its structure. You need to set out the structure of your SMSF.
  • Check your eligibility. Be sure to check out whether you are eligible to act as a trustee of a SMSF. With most SMSFs, all members are required to be trustees. Age, criminal convictions, previous bankruptcy or insolvency may prevent someone from being a trustee of a SMSF.
  • Check fund residency. In order to receive tax benefits, your SMSF needs to comply with ATO residency regulations throughout the financial tax year. Funds that don’t comply with residency have their investments and income taxed at a significantly higher tax rate.
  • Create the trust deed. The trust deed is a legal document outlining the structure and management of the fund.
  • Appoint trustees. All trustees are required to sign a legal declaration identifying they agree to comply with the trust deed and all other legal obligations. All trustees are held legally responsible for the running, management and compliance of the fund.
  • Record tax file numbers. Tax file numbers for each member of the SMSF must be recorded.
  • Open a bank account. A bank account is required to accept member’s contributions and manage funds and income from investments.
  • Complete ATO registration. The next step is to register your SMSF with the ATO. This is done once the trustees have signed and the fund has been legally established.
  • Plan your investment. The final step in setting up your SMSF is to write out your plan for your fund investment. Having this in writing ensures your fund complies with Australian super laws.

SMSFs and Taxation

For SMSFs that comply, the tax rate is set at 15per cent. For those funds that don’t comply with residency rules and other ATO regulations and super laws, the tax rate is significantly higher. It is very important to understand the taxation on your particular fund.

Managing and Accessing Your SMSF

A SMSF must be managed in accordance with Australian super laws and in the best interest of all its members. The fund must always be kept clearly separated from any member’s personal or business investments or affairs. In general, members can access their super funds when they meet certain criteria, such as when they reach a certain age or retire. Any member taking benefits prior to meeting certain criteria are likely to face severe legal consequences.

About the Author: Jeremy North has been working with the ATO for several years. He is a regular contributing writer who enjoys helping those who are looking for more information about setting up their own SMSF.

LIKE THIS POST?
I agree to have my personal information transfered to MailChimp ( more information )
Join our community of 8000+ subscribers to increase your net worth and build wealth
We hate spam. Your email address will not be sold or shared with anyone else.

Share this:

  • Tweet
  • Email
The tool that changed the way I manage my personal finance - Personal Capital, The Best Free Personal Finance Tool

Want to start a WordPress blog now? The onecentatatime.com blog is hosted by Siteground Web Hosting. For only $3.95 a month, Siteground can help you set up and host your website/blog quickly and easily.

About the Blogger Hi I am SB, a personal finance enthusiast with a career in software development. I am an immigrant to the USA since 2005, after being born and brought up in India. This 40 something technocrat lives and breathes personal finance whenever he gets time from the day job, job as a husband and a dad

Some links on this page may be affiliate links, if you make a purchase following the links, I may earn a commission. Read affiliate disclosure here
« Some Hidden Charges and How to Stop Them
Online or Traditional School, Which One Will You Choose? »

Comments

  1. Stephanie Smith says

    May 27, 2015 at 10:16 AM

    If I were to set up a self managed super fund, and become a trustee, I would have to feel comfortable with how it works and understand it thoroughly. The problem right now is I don’t! I have a lot to learn about the subject, and would probably need to hire someone to help me understand and consult with. You provided a really in-depth list of steps to take to get started, thank you for sharing. I’ll be keeping this in mind.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.



Create your own blog in 20 minutes and $20

Personal Capital, a free tool to change your financial health today

I use and suggest Upstart, for your personal loan need

CreditKarma, a free tool to check your credit scorey

I use Coinbase, for my crypto investments

101 Cents at a Time

101 Ways to Earn Extra Money on the Side
201 Frugal and Perfect Birthday Gifts
101 Ways to Save Money Everyday
101 Ways to be Better and Successful at Work
101 Ways to Save Environment and Energy
101 Frugal and Romantic Anniversary Ideas
101 Low-Cost Men's Fashion Ideas
101 Personal Finance Tips
101 Ways to Reuse Household Stuff
101 Things to Do, When Nothing to Do
101 College Graduation Gift Ideas
100 Tips for Ecommerce Startup
101 Ways to Enjoy Indoor During Winter
101 Ways to Beat Procrastination

Popular Posts

Quick Cash - How to make $100 legally, in a day
Living well on less than $15,000 a Year
Top survey sites for side income
What to do when auto repair goes wrong
Where should I invest my money now?
20 Ways to be productive and happy at work
51 Ways to get out of debt
Be a better person in 15 days, 15 ways
Income ideas for retirees and senior citizens
51 side jobs for college students
Urgently need a large amount of money?
Should I buy or should I rent?
Best Personal loan providers
25 Ways to save environment
25 DIY car repairs to save money
How to decorate office cubicle
How to show your wife you care
50 Financial Rules for Success
51 Frugal weekend family activity ideas
Become Rich By Saving 1 Hour Of Daily Wage
How much do I need to save for retirement?
How to negotiate your salary

Follow us on FaceBook

About Author

SB

Blogger by choice and IT manager by profession. Finance is my passion and gardening is my greatest satisfaction. Born in India, settled in US, Husband and a father. I created this blog in 2011 with a vision to help others. Thanks for your patronage. More info on my "about" page.

View all posts


Subscribe

Join our community of 5000+ subscribers to increase net worth and build wealth

Advertisements

Personal Stories

How I got a new HP computer replaced
Was COVID circulating in USA in fall of 2019?
How my credit score went up 800+
Why I didn’t invest in Bitcoins
How I controlled impulses to buy things
Why this blog is named One Cent at a Time

Subscribe via Email

Site Disclaimer

Disclosure of Material Connection: Some of the links in this web site are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”
Read full Affiliate disclosure


One Cent at a Time is published by SB. The opinions expressed herein by him are his own and not those of his employer or anyone else. All content on One Cent at a Time is for entertainment purposes only. By reading this blog, you agree that SB and/or One Cent at a Time is not responsible for any actions taken after reading this blog. For the full disclaimer, click here .

Major Media Mention

One Cent at a Time Media Appearances

Copyright © 2023 One Cent At A Time · Designed by Nuts and Bolts Media