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Who can have a SMSF?
Almost anyone can have a self managed super fund. You must already have money in superannuation or be able to make contributions to super.
However, some people cannot be members of a self managed fund because they cannot be a trustee or a director of a trustee company. For example, if you are insolvent, have been convicted of a dishonest act or been banned by the Australian Prudential Regulation Authority (APRA) or the Australian Taxation Office (ATO) you cannot be a trustee.

Who can be a member?
In general anyone can be a member of a superannuation fund. However, to be a trustee of a SMSF, each member must be a trustee or a director of the trustee company, over age 18, not be under a legal disability or be a disqualified person. 

Is there a minimum balance required in a SMSF?
There is no minimum amount. However, the costs associated with a SMSF usually mean that unless the super fund has assets of at least $150,000, or can make substantial contributions to superannuation, a SMSF may not be your most cost-effective option.

What are the main benefits of having a SMSF?
The main benefits of a self managed superannuation fund are as follows: 
  • - Control
  • - Flexibility 
  • Tax Savings
  • - Cost Savings

This is often considered to be the main advantage. You choose which assets your fund invests in. With a fund that’s managed by others, you may have no input into investment decisions.

You will be able to consider a range of investments that suit you (subject to legislation) and be able to change those investments as you see fit. 

Tax Savings
Self managed super funds can use credits from franked dividends to reduce the 15% tax rate. In a self managed fund you are in a better position to select your investments to reduce this tax rate, than you would be in a fund managed by others. 

Cost Savings

Managed funds may charge entry fees on contributions and have annual management fees which can vary, being on average 1.5%.
Your SMSF will cost you to set it up and will have ongoing administration and advisory costs. However, depending on your investment choice, there may be little or no ongoing investment management fees.
For self managed super funds with assets in excess of $200,000, there can often be significant cost savings when compared to a super fund managed by others.

How much will it cost to setup and maintain my SMSF?

Upfront Costs
Please contact our office for a fixed price quote on the establishment of your new SMSF.

Ongoing Costs
Ongoing costs will vary depending on the level of service you require. As a guide, you should allow about $200 per month, inclusive of GST for lodgement of tax returns and other statutory documentation.
In addition, ongoing financial planning advice and a liaison service between trustees and the superannuation fund administrator can be expected to cost around $150 per month including GST as a guide.

Are there caps on the amount I can put into super?
The Government imposes different caps on contributions depending on whether you make them from your before-tax (eg employer super guarantee contribution) or after-tax income. The contribution caps are summarised below.

Non-concessional (after tax) contributions:

The non-concessional cap is $150,000 per year. If you are:
under age 65 (at any time in the financial year), and you contribute over the non-concessional cap, you will 'bring forward' your following two years contribution caps. This means you can make up to three times the non-concessional cap (ie $450,000) in contributions at any time over a three year period.

Concessional (before tax) contributions:
The concessional cap depends on your age. For people aged under 50, it is $25,000 per year, and those over 50 it is $50,000. 
From 2011-12 onwards, The concessional cap $25,000 will be indexed annually to average weekly ordinary time earnings (AWOTE) and rounded down to the nearest multiple of $5,000.
Concessional contributions above this cap are taxed 46.5% (excess contributions tax).

What are the trustee responsibilities?
The trustees, as members of a self managed superannuation fund, are ultimately responsible for all aspects of the operation, administration and compliance of their fund. Significant penalties can apply to trustees who fail to comply with their obligations.
They must;
  • - act honestly in all matters affecting the fund 
  • - exercise the same degree of care and diligence as an ordinary person in 
  •   managing the fund 
  • - act in the best interests of all beneficiaries of the fund 
  • - keep fund assets separate from other 
  •   assets (i.e. the trustees' personal assets) 
  • - retain control over the fund 
  • - develop and implement an investment strategy 
  • - not enter any contracts, or do anything else, that would prevent the trustee 
  •    from properly performing or exercising their functions and powers 
  • - allow members to access information about the fund and their benefit 
Trustees should be aware of these responsibilities and comply with them at all times. Failure to act in accordance with these rules could result in penalties and loss of a fund’s tax concessions.

Is the fund limited to the types of investments it can make?
Although the superannuation rules require trustees to implement an investment strategy for the fund, they do not state exactly what investments a fund can acquire. However, the legislation does impose certain restrictions on fund investments in order to protect member benefits.

How is a SMSF taxed?

The taxable income of complying superannuation funds (including SMSFs) is subject to tax at the concessional rate of 15%

When can members access their super?

To ensure that superannuation savings are used for retirement and other permitted purposes, special rules apply to limit when members can access their superannuation. These are called preservation rules. Trustees of superannuation funds are responsible for ensuring that their fund complies with these rules at all times.
If a person has reached preservation age but not yet permanently retired, they can access their super in the form of a pre-retirement pension (but they cannot make lump sum withdrawals).

SMSF Info: