Is a self-managed super fund something you’re thinking about? Learn about the responsibilities that come with being a trustee. Speak to Agilis CA today.
It’s always a good idea to think about your retirement. Many people in Australia use a Super Fund to manage their retirement savings – but, some people opt to do something a little different and set up a self-managed super fund (SMSF).
What is an SMSF?
At a basic level, setting up an SMSF means creating a trust which has either individual or corporate trustees. These trustees manage the fund assets, and look after legal compliance, including auditing and reporting obligations.
For people who are prepared to look after the legal and financial elements of running a fund, entering an SMSF can mean more control over how funds are invested, over fees paid and over what insurance is taken out.
What is an SMSF for?
Any SMSF must have the same purpose. That is, to provide retirement benefits for fund members and their dependants. Any decisions made by trustees must be in line with this aim. Using the funds of an SMSF for anything else isn’t just unethical but is illegal.
An SMSF isn’t for:
- Early access to superannuation
- Investing in art or collectible for decorative purposes or personal use
- Buying holiday homes
Becoming a trustee
One of the main differences between an SMSF and other types of funds, is that in an SMSF the members are also the trustees and assume the compliance risk. If the SMSF is found to have breached the law, the trustees or the director, can be personally fined.
In addition, if there are disputes between the members, the ATO will not become involved. If the situation is serious enough, mediation or court may be an avenue but these routes will be at the members’ expense.
Understandably, the decision to become a trustee is a major one and needs careful consideration and professional consultation.
Updates to SMSF fund structures
Changes on 1 July 2021 mean that SMSFs can now have a maximum of six members, an increase from four. It’s important to note that as an SMSF is a type of trust, the number of trustees may still be restricted to less than six by existing state and territory laws. As always, it’s a good idea to seek professional advice before structuring your fund.
Speak to Agilis CA today about SMSFs
We recommend you speak to one of our SMSF advisors to help you determine whether a self-managed super fund might be right for you.
Contact Agilis CA today to discuss your SMSF needs.
This blog was originally published by BOMA.