A SMSF is a Superannuation fund that is controlled and operated by its members (not a Superannuation provider).
SMSFs (with the exception of single member funds) are defined as having the following characteristics:
- They have less than 5 members
- Each member of the fund is a trustee
- No member of the fund is an employee of another member, unless those members are related
- All trustees are members of the fund
- No trustee receives remuneration for his or her services as a trustee
The SMSF members are automatically trustees either as individuals or as directors of a company that acts as trustee. In this situation all the directors of the trustee company are members.
Since all members have to be trustees, this ensures that each member is fully involved and has the opportunity to participate in the decision-making processes of the fund.
The rules vary slightly for single member funds:
- The member is an individual trustee together with another individual that is a relative or another individual that does not employ the member
- Or the member is sole director of the trustee company
- Or the member is a director of trustee company together with another director that is a relative
- Or another person that does not employ the member, provided there are only two directors
In the same way as other superannuation funds, a SMSF receives concessional tax treatment, however since you control your money there are special rules relating to the operation of a SMSF and the investments it is allowed to make to ensure the tax concessions surrounding superannuation money is not abused.
Through our affiliations with professional administrators allows you to ensure that your fund remains compliant.
SMSFs are regulated by the Australian Taxation Office (ATO) and are therefore subject to the ATO’s audit process. There are heavy penalties for running a non compliant Super fund. In an effort to help our clients with administering their funds we have negotiated with a number of professional administrators to provide you with a reduced charge service that can help you remain compliant with very little effort.
If you have an existing 3rd party administrator, it costs you nothing to appoint us as your servicing agent and see if we can reduce your ongoing costs.