SMSF FAQs
You have questions? We’ve got answers
Welcome to our SMSF FAQs page, where you’ll find answers to common questions about SMSFs, their benefits, regulations, and services. We’ve compiled this FAQs list to help you make informed decisions about your financial future and feel confident in managing your SMSF. If you have a question that’s not addressed here, please don’t hesitate to contact us, and we’ll be happy to assist you.
What is a self-managed super fund (SMSF)?
It’s a type of super fund where you’re in control and make all the decisions about how your retirement savings are invested.
Who can set up an SMSF?
Any Australian over the age of 18 can set up an SMSF, as long as they meet certain eligibility criteria.
Why choose an SMSF over other types of super funds?
Some people prefer SMSFs because they have more control over how their super is invested and they can tailor their investments to suit their own personal circumstances.
How many members can an SMSF have?
SMSFs can have a minimum of 1 and a maximum of 6 members.
What are the responsibilities of an SMSF trustee?
SMSF trustees are responsible for making decisions about the investments, managing the finances of the fund, complying with super and tax laws, and ensuring the fund operates for the sole purpose of providing retirement benefits to members.
What’s the difference between individual and corporate trustee structure?
Individual trustees are members of the fund manage it themselves. They have full control, but they are also personally responsible for following super laws. Corporate trustee structure is a separate legal entity who manages the fund. The members still own the fund, but the responsibility of following laws and managing it goes to the corporate trustee.
What are the risks of having an SMSF?
When you have a SMSF, you’re in control of your retirement savings. But with control comes some risks you need to be aware of:
- Strict rules: SMSFs have to follow strict rules set by the government and if you break them, you could face big fines.
- Investment risks: You’re in charge of where your money goes, so if you make bad investment choices, your savings could suffer.
- No expert help: Without professional advice, it’s easy to make decisions that aren’t in your best interest.
- Takes time: Running an SMSF can be a full-time job, so be prepared to put in the time.
- Limited options: Compared to other types of funds, SMSFs have limited options for where to invest your money.
- Responsibility: If you have an individual trustee structure, you’re personally responsible for following the rules.
- Can be expensive: While SMSFs can be cheaper than other types of funds, setting one up and running it can still cost a lot.
- Complicated estate planning: When you die, your SMSF needs to be passed on to your beneficiaries. This can get complicated.
Can I use my SMSF to buy property?
Yes, you can use your SMSF to buy property, but there are specific rules and regulations that must be followed.
Can my SMSF borrow money to buy a property?
Yes, you can borrow money to buy a single piece of real estate. The borrowing must be done through a structure called a “bare trust” – this is also known as a limited recourse borrowing arrangement (LRBA).
How much control do I have over my investments in an SMSF?
With an SMSF, you have complete control over your investments and can choose to invest in a range of assets, such as shares, property, or fixed income securities.
Can I invest in international shares with my SMSF?
Yes, you can invest in international shares with your SMSF, but there are restrictions and requirements that must be met.
How often do I need to have my SMSF audited?
Your SMSF needs to be audited annually by a qualified auditor.
Can I still receive the Age Pension if I have an SMSF?
Yes, you can still receive the Age Pension if you have an SMSF, but it depends on your individual circumstances.
What happens to my SMSF when I die?
When you die, your SMSF assets will be paid to your beneficiaries according to your wishes.
Can I transfer my existing super into an SMSF?
Yes, it’s possible to transfer your existing super into an SMSF.
Do SMSF Partners give advice on investments?
Nope, we can’t help with investment advice since we are not financial advisors. Our main role is to establish your SMSF and provide and support. To get personalised information that fits your needs, talk to a financial advisor. They’ll be able to guide you in making the best decisions for your super and lifestyle.