SMSF or Self-Managed Superannuation fund is a retirement plan for employed individuals, which allows them to take control. A self-controlled super fund is a widely accepted option, which gives an individual to assume control over their retirement funds.
Setup SMSF
Learning about basic facts is an important aspect for anyone thinking to establish an SMSF. Gathering relevant information is important, as it will be helpful in making appropriate decisions and deriving maximum benefits later. Individuals who want complete autonomy in decision-making for investment choices for their super funds are likely to garner more benefits when equipped with proper knowledge.
SMSF is popularly called Do-It-Yourself funds. The name given to the funds stems from its basic feature that is a fund where the members are responsible for managing and monitoring the money invested. Moreover, the following features help one understand relative features of a SMSF better.
- The primary rule of a self-managed super fund is the number of members allowed in a single plan. The maximum number of members allowed is four or less.
- In such funds, a member is cited or referred as a trustee, thus, performing all the duties and responsibilities accordingly.
- For all the duties performed by the trustees (members), there is no remuneration awarded.
- Most importantly, no trustee in a fund can be an employee of another member in the same fund.
Many a times, individuals remain confused about what all benefits they can derive from managing super funds themselves. Moreover, there is dearth in knowledge regarding how SMSF borrowing works. Based on this feature, members are allowed to borrow against their SMSF fund. The borrowed funds can be used to make property investment, a lucrative opportunity for members to obtain income on regular basis.
However, borrowing against the fund has to be done keeping rules and regulation in mind. The guidelines are established by a governing agency called the Australian Tax Office. It is often recommended in order to avoid legal issues, it is best to hire a specialist or advisor that will make sure investment and borrowings are done in compliance with all the guidelines.
SMSF accounting
Accounting is important for any venture that involves investing money. SMSF accounting is a crucial responsibility of members that includes maintaining records of transactions or investments made against the funds. Along with accounting, the task of auditing is equally pivotal for SMSF members. Specialists can be hired to assist members with investment strategies as well as monitoring funds from time to time.