DIY Super Fund - Self Managed Super Funds for Dummies
Do you want to manage your own self-managed superannuation fund (SMSF)?
Wealth Within provides a comprehensive self-managed superannuation fund (SMSF) package to support you in setting up a DIY Super Fund right through to the ongoing accounting and auditing requirements.
Once you've established your self-managed super fund, you may want to consider maximising the returns by investing in our Direct Equity Managed Account Service - an individually managed accounts service with a real difference
Alternatively, if you would like to learn how to gain the required knowledge to consistently profit from the stock market so that you reap the rewards in retirement, check out the trading education courses can deliver. Our trading courses are an excellent way to ensure you’re getting the most out of your superannuation when managing your investments in a self managed super fund.
Self Managed Super Fund Frequently Asked Questions
What is a Self Managed Super Fund?
A SMSF is a small superannuation fund, where control is kept in the hands of the members. The members decide how the fund will operate and what investments the fund will invest in.
What are the benefits of setting up a SMSF?
The benefits of operating a SMSF include:
- Control - a SMSF provides you with an opportunity to make the decisions as to how your funds are invested and how the fund is to operate. You have the flexibility to alter the fund's investment strategy as and when required to meet the changing needs of the members or any changes in the economic climate.
- Investment Choice - your fund can invest in a large range of investments including shares, bonds, property, cash or any other asset you feel suits the investment objectives of the fund (provided it meets the sole purpose test).
- Low taxation - Tax concessions are available for SMSF, consequently DIY super funds have become a powerful wealth creation vehicle enabling ordinary Australians to maximise their income and lifestyle in retirement.
- Protection - the assets of the SMSF are protected from bankruptcy and other legal claims. This can be a relief when unfortunate events occur.
Is a SMSF suitable for me?
There are certain regulatory responsibilities placed on trustees of SMSF, therefore when setting up a fund it is important to consider various issues including:
- Will I have the time to manage and administer the SMSF?
- Will there be sufficient funds in the SMSF to make the administrative costs worthwhile?
- Will the other trustees of the fund be suitable co-investors?
How long does it take to set up a SMSF?
Once your signed application is received by Wealth Within, it generally takes around 1 week to establish a new fund.
What funds are used to create a Self Managed Super Fund?
There are 3 ways of transferring money or assets into a fund:
- make a contribution to the fund
- roll over existing superannuation benefits into the fund
- purchase assets by the trustee of the fund
Another benefit of a SMSF is the ability to consolidate your superannuation (particularly if you have a range of super funds). Consolidating your funds can save on the high fees you pay for managed funds to manage your money.
Who can be a trustee of a SMSF?
The trustee can be either an individual or a trustee company. Individual trustees are generally the most common. Where the individual option is chosen every member must also be a trustee. A fund cannot have a sole individual as a trustee, there must be more than one person as trustee if the individual option is chosen. To overcome this, a single member fund can appoint a second trustee provided the member is one of the trustees and the member is not an employee of the other trustee (unless they are relatives) or they can appoint a company as trustee. Where a trustee company is appointed, all members must be directors of the trustee company.
How many members can be included in a Self Managed Super Fund?
A SMSF cannot have more than 4 members and all members must be Trustees of the fund. Therefore, you have a choice as to who becomes a member of the fund which may include your partner, members of your family, a business partner or friends. This means that the super balances of each member can be consolidated into SMSF.
Can employer contributions be included in my Self Managed Super Fund?
Yes. With the introduction of superannuation choice, you can instruct your employer to pay your superannuation contributions into your SMSF.
Can the fund provide insurance?
Yes, with a SMSF you can organise life and total and permanent disablement cover to insure the members of the fund. The SMSF pays the cost of the insurance and claims it as a tax deduction, which makes the costs of insurance more tax effective.
We can assist you in selecting the best insurance options for your SMSF.
Note: Your existing superannuation fund may already include insurance cover. It is recommended, before setting up a SMSF, that you seek independent advice about the insurance consequences of transferring your superannuation from your current superannuation scheme.
What are the ongoing costs of a Self Managed Super Fund?
This is an optional service we provide for our clients. We are not directly involved in the preparation of accounts or the auditing process - this service is outsourced to a specialised professional accounting firm. Compliance fees are paid by the fund and start from $770 (Inc GST). A full list of the fees is outlined below.
Description Base Administration Charge* (Accounting and Taxation) $770 Audit Fee (Basic Fund) $440 Additional Investment $66 per investment Real Estate Property $330 per property Additional Members $165 per member Pension Fee $165 per pension Existing Fund Takeover (Once off charge) $330 per fund
*Base Administration Charge covers up to two members and up to 10 investments held during the year and includes:
- Preparation of financial statements
- Preparation and lodgement of income tax and regulatory return
- Preparation and lodgement of superannuation surcharge statements
- Preparation of member's statements
Establishing your Self Managed Super Fund
We support you through every stage of the process and provide you with the full documentation necessary for the establishment of a complying superannuation fund for up to 4 members, according to legislative requirements while being flexible enough to suit your individual needs.
The establishment fee for a self-managed super fund is from $649 (for individual trustees inclusive of GST) and includes:
- Arranging for the establishment of a complying trust deed for your super fund
- Registration of a Tax File Number and Australian Business Number
- Lodgement to become a regulated super fund
- Notice of consent to act as a Trustee
- Resolutions to establish the fund
- Binding death benefit nomination
- Establishment of a bank account
- Establishment of insurance cover under your SMSF
- Arranging for the establishment of a new company to act as Trustee for your personal super fund if required instead of individual Trustees*
* A separate company establishment cost of $796 (GST inclusive) applies.
Annual Compliance Package
This is an optional service we provide to our clients. We are not directly involved in the preparation of accounts or the auditing process - this service is outsourced to a specialised professional accounting firm. For a full list of compliance fees, please call our Client Services Team on 1300 858 272 or Melbourne direct on (03) 9290 9999. The service includes:
- Financial statements
- Income tax and regulatory returns
- Members statements
- Preparation of fund minutes
- Investment strategy guide that provides a basis
Self-managed superannuation enables you to take control of your future
Self Managed Super Funds are simple to set-up and the fee structure may provide substantial cost savings compared to your current retail superannuation fund.
You can find out more about our self managed super fund services by calling our experienced client services consultants on 1300 858 272 or Melbourne direct on (03) 9290 9999