What is a Self Managed Super Fund?

SMSF pretty much says it in the name, this is a fund set up by an individual or up to four people who each become trustees of the fund. You might also hear it referred to as a DIY Super. The only purpose of the fund is to provide for its member’s retirement, (or for their family members if they die prior to retiring).

The advantage is that you get to have a say where your funds are invested and control them.

The system is not without its pitfalls if you don’t know what you are doing. There are legal obligations and responsibilities with respect to what you can invest in and taxation. 

This is where Davis Accounting in Parramatta and Campbelltown can help. We are specialist SMSF accountants in Sydney who can provide Self Managed Super Funds accounting advice. Why not call us today on 0414 731 757 to find out more.

Some of the Do’s of Self Managed Super Funds

Running your own retirement fund can be time-consuming and complex. Importantly, you must remember it’s a legal tax structure solely to give you an income in retirement.   There are some things that you must do. These include:

• Be prepared to be a trustee or director, and abide by all the legal implications that brings with it.
• Make sure you have and follow, a strategy for investment appropriate to any risks you are prepared to take. You also need to ensure these will meet your needs in retirement.
• Have the necessary skills and financial experience to invest soundly.
• Set aside time to manage the fund and research your investments.
• Take into account operating expenses like taxes, audits, financial, accounting, and legal advice.
• Maintain complete records and ensure you’re audited annually by an SMSF auditor.
• Make certain you have insurance. This should include total and permanent disability cover for yourself and other super fund members. 
• use the money only to provide retirement benefits

Setting up an SMSF makes you personally responsible and liable for all the decisions made in respect of the fund. This is the case even if another member of the fund makes the decision or you act on advice from a professional.

Make sure you get it right by contacting specialist SMSF accountants in Parramatta and Campbelltown, Davis Accounting. 

Some of the Don’ts of Self Managed Super Funds

As well as the things you must do for SMSF’s, there are some pitfalls to be avoided. These include:

• You, the other trustees or any family member cannot borrow money from the fund. This could lead to the fund being declared non-compliant by the ATO and incur taxes and penalties.
• You cannot use any of the assets of the fund for personal benefit. This means that if the fund owns a property you cannot use it. It may be possible to rent it out to people not related to your fund in any way.
• You cannot accumulate any more than five per cent of your SMSF as investments in “in-house” assets.

This might all sound a bit like walking through a minefield. There are many complex rules you must adhere to. 

Why not let Davis Accounting cast their Self Managed Super Fund accounting expertise over your records. That way you will be confident in the knowledge that you have control over your retirement fund. 

We are well versed in Australian tax laws and can help if you are in Sydney, especially in the Parramatta or Campbelltown areas.

Self Managed Super Funds and Payment of Pensions and Tax

SMSF’s are relatively new and many are still discovering what they can offer.  Here are a couple more things to remember.

Pension Payments

Self Managed Super Fund members receiving retirement phase pensions must pay the minimum pension amount for the 2019 financial year on or before the 30th June 2019.

If you are in pension phase, you need to ensure the minimum pension has been paid to you for this financial year. Where these requirements have not been met, your fund will be subject to 15% tax on your pension investments, rather than being tax-free. 

SMSF fund expenses 

For members in the accumulation phase, it is important that any expenses are actually incurred or paid before 30 June to be deductible in the current financial year. 

As an SMSF Specialist Advisor™ (with the SMSF Association) Davis Accounting are passionate about helping trustees and other professionals manage their own super funds. Contact our offices in Parramatta or Campbelltown, Sydney for SMSF accounting services.

Davis Accounting Services Pty Ltd ABN: 44 131 659 857 Liability limited by a scheme approved under Professional Standards Legislation

**Disclaimer: Be advised this information is of a general nature only. Specific advice needs to be obtained for your individual situation. Neither the firm nor any of its employees accepts any liability for any loss or damage to any person as a result of reliance on the rates and information set out on this newsletter.