About SMSF

A self managed super fund is a small superannuation trust that has the primary purpose of providing retirement benefits to the members, where the members themselves act as trustees. This means that the members control and run the super fund.

SMSF operates in much the same way as other types of superfund. The trustees hold the assets of the super fund for the benefit of the members. In a SMSF the members, being also the trustees, hold the assets of the super fund. As the members hold the assets, they have complete control (including over investments), flexibility and security over their superannuation.

The members, being also the trustees, develop the investment strategy, make investment decisions and invest accordingly.

SMSF can invest in almost any investment assets and products, subject to certain restrictions. The SMSF may invest in residential and commercial real property directly, with or without borrowings.

A SMSF is defined as a super fund where:

  • there are up to four members,
  • all members are trustees (or directors if corporate trustee, with all directors also members), and
  • no trustees receive any remuneration for performing their trustee services.

An exception applies for single member SMSF, where:

  • there are two trustees, with one being a member, or
  • a company acts as trustee, the member is the sole director of the corporate trustee. The other option is where the member is one of two directors of the company.

In the case of a corporate trustee with more than one member, all members must be directors of the company, and all directors must be members of the SMSF.

Super laws and regulator

The Australian Taxation Office has the responsibility of regulating SMSF. The primary legislation that governs superannuation funds, including SMSF, is the Superannuation Industry (Supervision) Act 1993 and Superannuation Industry (Supervision) Regulations 1994. The laws prescribe the structure, operations, preservation requirements and other requirements to ensure proper operations of superannuation funds and the integrity of the superannuation system.

Super funds, including SMSFs, receive generous tax concessions as an incentive for people to save for their retirement. SMSF trustees must follow the super laws to receive the tax concessions.

Almost anyone can set up a SMSF. A person that is disqualified cannot be part of a SMSF.

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