There are a lot of restrictions placed on your superannuation. However, if you have a Self Managed Super Fund, there plenty of things you can do that often aren’t possible with a traditional managed super fund. Here are some opportunities that you could take advantage of in a SMSF:
>> The assets of the fund can be used to borrow to acquire a specific investment property. This is something that generally can’t be achieved via a managed or pooled superannuation fund. The rules are quite complex so professional advice should be engaged if a trustee is contemplating this as part of an investment strategy
>> The trustees can choose the assets the SMSF invests in. It is the responsibility of the trustees to develop an investment strategy and choose the investments of the fund. This can create opportunities that may not be available otherwise.
>> The tax can be managed according to the individual circumstances of the members. In other types of super funds the member may have no control at all over how and when the income of the fund is taxed. A SMSF provides more certainty.
>> You can have your SMSF own the premises your business operates from. Many business owners lease their commercial premises from their self managed super fund. Money that would otherwise be used to pay rent is used to build for retirement instead.
>> Life insurance can be owned by the self managed super fund. A SMSF can choose to own life insurance on its members. This is true for most superannuation funds, but with an SMSF the provider of the insurance and the structure of the insurance can be tailored specifically for the needs of the members.
These are just five points that differentiate a SMSF from many other superannuation structures. There are many others, so make sure you get professional advice before setting up your own fund. Contact us if you would like help.
The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.