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SMSF

It seems that everywhere you turn, somebody is talking about Self Managed Superannuation Funds (SMSF).

According to the Australian Taxation Office, funds held in SMSF’s have doubled in the past three years alone and now account for almost one-quarter of all the funds held within the superannuation industry.

Australian’s are choosing to start taking control of their retirement incomes as many are beginning to find that the flexibility offered in a SMSF enables them to better control their financial futures.

Today, people are not only retiring earlier than ever before, they are also living longer. For many, retirement could represent 30 or more years!

The SMSF is formed by the Trust Deed. The trust deed provides the governing rules of the fund and you need to ensure that your superannuation funds’ trust deed does not prohibit borrowing so that you are not in breach as the trustee.

The Trustees of the SMSF are responsible for all decisions that are made in relation to the operation of the fund the Trustee of your SMSF is you or a trustee company that you control.

It is important that you understand the obligations and responsibilities of being the Trustee of your superannuation fund as serious penalties may be applied should the rules of operating a SMSF not be complied with.

When setting up your SMSF, all members of the SMSF must also be Trustees or, in the case were there is a Corporate Trustee, each member may also be a Director.

For example:

If ‘Mum and Dad’ were setting up the Mum and Dad Superannuation Fund then:

    1. Mum and Dad would both be Members of the SMSF; AND
    2. Mum and Dad would both be Trustees of the SMSF.

On the other hand, if Dad was setting up his own SMSF:

    1. Dad would be the sole Member;

and since Dad cannot be the sole Member and the sole Trustee, then either:

      • Dad and Mum would be the Trustees, or
      • Dad Pty Ltd would be a Corporate Trustee where Dad is the sole Director.

Your Self Managed Superannuation Fund can quickly, easily and cost-effectively be created by downloading the SMSF Application Form.

Once you have answered a few simple questions, you can mail, fax or email this form directly to the relevant address on the application form and your SMSF documents and Trust Deed will be professionally created, bound and mailed directly to you.

When you receive your SMSF from Equiti, you will receive a comprehensive package that includes everything you need to properly execute and register your SMSF including a Superannuation Fund Instructional Guide. This guide will explain many of the key points that you will need to know to properly operate your SMSF and will explain the various statutory and regulatory requirements of trustees.

The SMSF Trust Deed provided by Equiti has been prepared by a leading firm of solicitors who specialise in the preparation and production of SMSF Trust Deeds and ensures that the governing rules within the Deed do not restrict the fund from entering into a geared investment strategy.

Once you have received your ABN and TFN for your SMSF from the ATO, you will also need to:

    1. establish a separate cheque account for your SMSF (by taking your SMSF Trust Deed to the bank of your choice); and
    2. arrange for the rollover of your existing superannuation funds into your newly created SMSF. You are recommended to seek qualified and professional financial advice on this.

You can arrange a rollover by simply contacting your existing superannuation fund, completing the funds specific rollover forms and arranging for your superannuation money to be deposited into your SMSF cheque account.

Keep in mind that you do not need to close your employer sponsored or industry superannuation fund in order to transfer money into your SMSF.

In some cases, it may be more appropriate to arrange a ‘partial transfer’ of a sufficient amount of superannuation money into your SMSF and maintain any benefit that you have from being a member of your existing fund.

If you are unsure of what may be best for you, consult an Equiti financial adviser prior to making any investment decision.