Australia has over 610,000 Self Managed Superannuation Funds (SMSF) worth over $900 billion in super assets.  Running an SMSF allows you to have a unique strategy to achieve you and your family’s retirement, lifestyle and estate planning goals.    Our self managed super fund (SMSF) strategy  team are here to help with ongoing self managed super fund investment strategies, full SMSF advice, daily SMSF administration, financial planning and self managed super fund setup.

There are some key benefits of running an SMSF particularly with regards to gaining control over the investment assets of the fund, rather than leaving it to fund managers.  Over the past few years we have seen a large move to self managed super by people who believe they “can do a better job themselves” as many have seen their commercial superannuation funds reducing.

Managing your own superannuation is a significant responsibility, but for those willing to invest the time and effort, a Self-Managed Super Fund (SMSF) can provide considerable benefits. This comprehensive guide will explain how to run an SMSF, shedding light on the process, obligations, and best practices for effective fund management.

Steps to Run an SMSF

1. Establish Your Fund

Establishing an SMSF involves creating a trust deed, appointing trustees, registering the fund with the ATO, and creating an investment strategy. These steps should be carried out with the assistance of qualified professionals, such as an SMSF specialist, financial advisor, or lawyer.

2. Contributions and Rollovers

Once your fund is established, you can start making contributions. These may come from personal contributions, employer contributions, or rollovers from other super funds. It’s essential to monitor the types and amounts of contributions to avoid exceeding the contribution caps.

3. Manage Investments

One of the key responsibilities of running an SMSF is managing the fund’s investments in line with your investment strategy. This includes conducting regular reviews of the strategy and adjusting it as necessary to align with changing market conditions and member needs.

4. Regular Audits

Every SMSF needs to be audited annually by an approved SMSF auditor. The auditor checks the fund’s financial statements and ensures the fund is complying with super laws. You need to appoint an auditor at least 45 days before your SMSF annual return is due.

5. Annual Returns

You must lodge an annual return with the ATO, which includes your fund’s income tax return, regulatory information, member contributions, and an audit report details.

Frequently Asked Questions

Q: What are the responsibilities of an SMSF trustee?

A: SMSF trustees are responsible for managing the fund according to super laws, ensuring the fund’s compliance, creating and implementing an investment strategy, documenting and maintaining records, and organising the fund’s audit and annual return.

Q: Can I seek professional help to run my SMSF?

A: Yes, while you have the final responsibility for your SMSF, you can engage professionals such as financial advisors, accountants, tax agents, and SMSF auditors to help run your fund.

Q: How much time does it take to run an SMSF?

A: The time required to run an SMSF can vary widely depending on your fund’s complexity, your knowledge, and how much you choose to outsource. On average, members spend several hours per month managing their SMSF.

Q: What happens if my SMSF fails to comply with the rules?

A: Non-compliance with SMSF rules can lead to significant penalties, including fines, disqualification as a trustee, and the fund losing its concessional tax status.

Conclusion

Running an SMSF requires commitment, time, and a strong understanding of financial matters and superannuation law. However, the rewards – including greater control over your retirement investments and potential tax advantages – can be significant. Always remember that while you can enlist professionals’ help, the ultimate responsibility for managing the SMSF rests with you. It’s crucial to stay informed about the regulatory requirements and to seek professional advice when needed. Running an SMSF can be a rewarding journey towards securing your financial future, providing you take the time to manage it properly. Discover more about how we help with SMSF administration and accounts.

Investment control and investment choice is one of the main reasons for having a self managed super fund.  There is a much wider choice of what the trustees can invest in including property investment, art, shares, hedge funds, gold, etc. and the strategies that can be designed to maximise this choice depending upon you goals.  There are many rules around the investment choices, however a SMSF Association accredited advisor can help you to design a suitable investment strategy.

There are many estate planning benefits to running an SMSF. Our SMSF specialists can design a strategy to optimise tax efficiencies.  SMSFs can also make binding death benefit nominations that do not lapse.  Our team have many examples of how we have helped clients design SMSF estate planning strategies including on occasions when clients have unfortunately been diagnosed with a terminal illness.

Speak with our SMSF taxation experts to discover the control and flexibility that trustees have over the tax position of the fund. With good internal structuring or strategic investment planning tax can be significantly reduced.

With business clients and clients who may be at risk of bankruptcy it’s important to know that your benefits are protected.

Our team can compare your current costs of your superannuation with an SMSF and depending upon the account balance this can be significantly lower.  The main ongoing costs are for the self managed super fund administration which covers the SMSF accounts, SMSF annual tax return and SMSF annual audit.   Our costs are transparent and we are happy to provide these.

Running an SMSF allows much flexibility in terms of tax free and flexible income streams for those members nearing the pension phase.

Once you have set up your self managed super fund you will have taken the responsibility to manage your retirement savings and comply with the superannuation laws and Australian tax laws.