Self managed super

Published in the Gold Coast Sun, June 2007

New superannuation laws have brought the self-managed superannuation fund firmly into the spotlight.

These are small superannuation funds of between one and four members, who decide how the fund will operate and what investments the fund will invest in.

A minimum of $100,000 is considered viable, and members are usually looking for more control over their investment, great taxation benefits and more investment choice.

Wealth Within director Dale Gillham said they were easy to set up but were not suitable for everybody.

“It is just a matter of educating the client in understanding the legal requirements and supporting them in identifying the investments that will allow them to achieve the best long term results,” he said.

According to Mr Gillham, the benefits include control over how funds are invested and how it will operate.

“You have the flexibility to alter investment strategy to meet the changing needs of the members or any changes in the economic climate,” he said.

“Your fund can invest in shares, bonds, property, cash or any other asset you feel suits investment objectives.”

Tax concessions are available and assets are protected from bankruptcy and other legal claims up to a certain threshold.

Family members can pool investments into one fund, which increases their investment options and potentially reduces costs.

If a member dies, a fund can continue and investments can remain for the benefit of the remaining members in retirement.

The potential downsides are that it cannot borrow funds to leverage, and trustees must ensure it is run in accordance with the tax office guidelines.

Administration, taxation and superannuation issues also need to be dealt with appropriately.

A fund can be set up in weeks and cost from $400 to a few thousand dollars, and employer contributions can be included.

The range of investments can be quite broad, and include listed shares, cash and fixed interest securities, managed investments, private unit trusts, direct property, artwork and other collectables.

For more information on establishing a self-managed superannuation fund click here.

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