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Learn what a Self-Managed Super Fund (SMSF) can do for you from the team at Newcastle Financial Planning Group

What is a SMSF (Self-Managed Super Fund)? And how do you know if it’s the right choice for you? 

A self-managed superannuation fund (SMSF) is a super fund where you’re in control. You’re not only a member but also a trustee – or you can get a corporate trustee, but either way, you are responsible for the SMSF. You choose the investment strategy and manage the investments and have 100% responsibility for keeping it compliant. 

An SMSF is flexible enough to allow you to invest in different assets like residential and commercial property directly or through unlisted trusts, direct shares, high-interest cash accounts, term deposits, hybrid income investments, unlisted assets, and international shares – either directly or through investment vehicles such as Wholesale Managed Funds or Exchange Traded Funds (ETFs). 

An SMSF can have up to six members. You have access to pooling your established fund to build up the balance that can provide your SMSF with more investment options to consider compared to an individual super account. 

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Secure Your Financial Future with SMSF Advice

At NFPG, our team of experienced SMSF specialists will thoroughly assess your superannuation options and how you can benefit from a self-managed super fund, including:
 

Superannuation Strategy 

Invest your funds in accordance with your current needs and future retirement goals. 

  

Investment Portfolio 

Accumulate funds in your preferred investment vehicle – shares, property, and managed funds are just some of the options available. 

  

Tax Strategies 

You can get make your superannuation work harder for you by using self-managed super fund related tax strategies. 

Self Managed Super Fund (SMSF) Advice » self managed super funds

Providing SMSF Advice: Why Do You Need It?

A self-managed super fund is different from other types of super funds because it’s owned by its members, not an institution. This means that all profits made by the fund will go back into it for reinvestment into future investments – which usually results in better returns over time. 

You could consider setting up an SMSF if: 

  • You have the time and financial literacy to actively manage your fund; 
  • You have a thorough understanding of your role and responsibilities as an SMSF trustee (or director of the corporate trust); 
  • You don’t trust someone else (like your employer) to manage this investment opportunity for you; 
  • The fund’s balance would make this a cost-effective option; 
  • The fund’s income would be sufficient to fund the running costs of the fund. 

Find out more about your superannuation options – speak with a Newcastle Financial Planning Group Adviser. 

How SMSF Advice Can Help You

Super Fund Investment Options

Super Fund Investment Options

Tax Strategies

Retirement Planning Options

Seeking advice for your SMSF? Let the team of seasoned financial advisers at NFPG help you! We’re here to provide financial advice and help you achieve your financial goals. 

Book Your Consultation Now! 

Superannuation Advice Newcastle FAQs

One of the primary differences between an SMSF and other types of industry funds is that you have complete control over your investment strategy. 

This includes deciding how to mix asset classes within your portfolio, which can be particularly useful if you are trying to match your investments to your retirement timetable or individual circumstances. 

If you’re new to self-managed super funds, it’s important to remember that there are benefits and disadvantages. One of the primary differences between an SMSF and other types of super funds is that you have complete control over your investment strategy. 

Managing a Self-Managed Superannuation Fund (SMSF) generally demands a greater investment of time, effort, and financial knowledge in comparison to other types of super funds. Additionally, it carries heightened responsibilities and regulatory obligations. It is crucial to possess a comprehensive comprehension of the rules and regulations established by the Australian Taxation Office (ATO) pertaining to SMSFs. 

Furthermore, it is important to note that as the owner of an SMSF, you are directly responsible for covering the associated operating expenses (such as annual financial statements and tax filings). Therefore, it is essential to ensure that you maintain a sufficient balance and cash reserve to meet these financial obligations. 

One thing we do not recommend is choosing a particular type of investment simply because it’s popular or has been recommended by someone else. For example, if there was no risk involved in investing in managed funds then the market would be full of them! 

SMSF trustees must lodge an annual tax return and audit, as well as pay ATO and ASIC fees which are based on a fixed fee. Generally, Personal and Industry Super funds are based on a percentage of funds invested, which are not capped and therefore increase as a dollar amount in correlation with your account balance. 

As your SMSF account balance grows, the more cost-effective it becomes, but the total cost of running an SMSF will depend on the related investments such as property rental fees, direct share brokerage costs, and Managed Fund or Exchange Traded Fund ongoing management fees. 

One of the main advantages of an SMSF is the ability to leverage or borrow within the fund which effectively allows you to have more funds invested compared with a retail or industry fund. 

Borrowing within a fund can be arranged through a Related Party Loan (RPL) or through a commercial lender, which both have advantages and disadvantages; a professional financial advice should be sort. 

Additional risks can include higher costs, lack of diversification, and potential cash flow issues. 

Like all super funds, SMSFs benefit from concessional tax rates. In the accumulation phase, tax on investment income is capped at 15 percent; in the pension phase, there is no tax payable – not even capital gains tax (CGT). 

One of the main benefits of an SMSF is being able to invest in direct property and delay the sale of the asset until your funds are in the pension phase, which ensures no CGT is payable. 

Like all super funds, SMSFs benefit from concessional tax rates. In the accumulation phase, tax on investment income is capped at 15 percent; in the pension phase, there is no tax payable – not even capital gains tax (CGT). 

One of the main benefits of an SMSF is being able to invest in direct property and delay the sale of the asset until your funds are in the pension phase, which ensures no CGT is payable. 

As a general rule, a trustee of an SMSF is prohibited from acquiring an asset from a related party of the fund, however, there are some very limited exceptions. Related parties include members and their relatives as defined above and any company or trust they control or significantly influence, either individually or as a group. 

One of the main reasons an SMSF is prohibited from acquiring assets from a related party is that it could lead to personal assets being sold to the fund at inflated prices. This could have the effect of allowing money to be withdrawn from the fund earlier than the time permitted by the superannuation law. 

The limited exceptions allow an SMSF to acquire certain assets from a related party. These include: 

  • Listed securities, such as shares, units in unit trusts, or bonds and debentures that are listed on an approved stock exchange. 
  • Business property that has been acquired at market value. 
  • In-house assets where the value of the fund’s in-house assets after the acquisition do not exceed 5% of the total value of the fund’s assets at market value. 
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