If you are planning to set up an SMSF, you should think about it carefully before making this decision since SMSFs aren’t for each and everyone. It’s a foremost financial decision and you need to have the time and enough skills to do it. Most importantly, you should certainly get professional advice and consultancy from Professional SMSF Specialty Advisors.
There is a lot to be taken care of when you are planning for the SMSF.
In general, if you set up an SMSF you become a trustee of the fund. This means you’ll be entirely responsible for managing your SMSF as per its trust deeds and the laws and rules that apply to SMSFs. You need to manage your fund’s investments in the way that benefits your fund members and it should also be in accordance with the law. Your investments must be separate from the personal and business affairs of fund members, including yourself.
Here, you can accept money contributions for your members from various sources but there are some rules and restrictions, mostly depending on the member’s age and whether they’ve exceeded the contribution caps, etc. Generally you can’t accept an asset as a contribution from a member, though there are some exceptions that you need to know.
If you are a trustee you’ll have a number of administrative responsibilities – for example, you’ll need to arrange an annual audit of your fund, keep appropriate documentation and records and report all to the Australian Taxation Office of the Australian Government on your fund’s operation.
As per the Government’s SMSF Laws, accessing the super in your SMSF to pay benefits is generally only allowed when a member reaches the ‘preservation age’ and meets one of the specified conditions of release – for example, retirement. Here, there are very limited circumstances, such as death or terminal illness, where a member’s super can be accessed before the ‘preservation age’. If the super benefits are illegally released, then there are significant penalties on such unlawful actions of the trustees.
Simply put, if you are planning to set up and manage a Self-Managed Super Fund, you need to be very careful about the governing laws and the regulations. You may also take professional consultancy from the SMSF Specialty Advisors in the industry that help you looking after everything in your SMSF like from initial set up, ongoing accounting and compliance, to general advice and audit.