Over the years, working individuals in Australia have grown informative and receptive to market conditions. People today have become planners and prefer to take control of their income generation during retirement. SMSF or self-managed superannuation has rapidly grown into a reliable means of planning for retirement stage among working personnel in Australia.
The fast emerging trend is largely due to the global economic slowdown paired with a high expense incurred in other retail superannuation plans. Setting up SMSF has proven to be a profitable alternative in comparison to retail plans that come at a high expense. However, being self-managed, an individual needs to have sufficient knowledge about how to operate their superannuation funds.
Establishing an SMSF yields sizeable benefit to individuals, only when the funds are maintained in accordance with the guidelines laid down by the Australian Taxation Organization. An SMSF in compliance with every rule and regulation set by the governing body will be eligible to avail tax benefits later. The tax levied under these funds is the lowest in comparison to any other plan available in Australia. The members only have to pay a maximum rate of 15% tax, which can possibly further reduce owing to other tax credits.
Another key benefit associated with Do It Yourself Funds is the control of investment. The liberty of taking investment decision is a crucial driving factor for individuals to prefer establishing this fund. An SMSF Property is a widely chosen investment choice among various other options available for members. One can choose to invest in shares, artwork, hedge funds and more, apart from real estate. Moreover, SMSF members enjoy the freedom to lease properties in real estate through their super funds.
For individuals with no knowledge on how to run a self-managed superannuation fund, it is imperative to collect basic information first. Their lack of expertise may lead to issues in the future course or difficulty with the regulatory body. To establish a SMSF, some basic information includes the following.
- In a single SMSF, maximum number of members allowed are four
- A member cannot be an employee of another in the same fund
- Members in an SMSF are called trustees to the fund
- They are responsible for carrying out the duties of a trustee, for instance conducting SMSF Audits
- Trustees in a SMSF are not remunerated for duties performed
Professionals, adept in the handling such special funds, are available and can be hired by individuals who are facing troubles in maintaining regular audits. They charge a nominal fee, which is based on a tab pertaining to the fee structure released by the official regulatory body.