SMSFs – 5 Big Benefits To Having Your Own Fund

“It may be that the SMSF is the absolute way of the future”

Jeremy Cooper – Head Of The Cooper Review Into The Superannuation System

A SMSF (“Self Managed Super Fund”) has a number of big advantages compared to other forms of superannuation.  Here are 5 of them…

1. Control

The members, who must also be the trustees, decide on the fund’s investment strategy and choose the fund’s investments.  A SMSF can bank with any bank, insure with any insurer and, subject to the sole purpose test, invest in practically most investments.

The trustees also select which professionals they want to help them administer the SMSF, including the financial planner, tax accountant and auditor.

2. Flexibility

The fund’s investments can be tailored to suit the members’ specific needs before and after retirement.  This flexibility allows for more specialised investment selections and can produce significant taxation advantages over public offer funds.

Also, in retirement the trustees have greater flexibility in paying tailored income streams to suit the member’s income and taxation needs subject to superannuation legislation.

For example, the SMSF can pay an account based pension.

3. Taxation

The SMSF’s investments may be rolled over from accumulation phase to fund an account-based pension without incurring capital gains tax.

This is an option not always available to members of public offer funds.

4. Longevity And Estate Planning

A SMSF can operate before and after retirement and after the death of the original members, as long as additional members have joined.

Although a SMSF must comply with administrative and reporting requirements, which are as strict as administration rules found with public offer funds, the estate planning opportunities are much greater and more flexible.

For example, if the trustees of a SMSF invite their children to become members, the SMSF can continue for generations.

5. Contribution Splitting

Contributions made to a superannuation fund are able to be credited to your partner’s account as long as the receiving partner is eligible to make contributions in their own right.

This helps to avoid a situation where one partner accrues a very large benefit and the other has a lot less, and sets up the ability for both partners to draw more equal pensions.

Not all public offer funds are able to offer this benefit under their trust deeds, but a SMSF trust deed can provide this option.

These are just 5 of the benefits of having your own SMSF.  If you’d like to know more, we at Peter H. Hunt & Associates have just published a special report titled “New Ways For High Net Worth Individuals And Business Owners To Build Wealth Tax Effectively With A SMSF”.

To get your FREE copy, simply contact us by clicking here.