SMSF Basics – What is a Self-Managed Super Fund (SMSF) and what types or structures do they have?

SMSF Basics – What is a Self-Managed Super Fund (SMSF) and what types or structures do they have?

SMSF Basics – What is a Self-Managed Super Fund (SMSF) and what types or structures do they have?

Self-Managed Super Funds (SMSF) are Regulated by an Act of Parliament, have different types or structure, are a special Trust (like the major corporate super funds) and are governed by the Sole Purpose Test.

An SMSF is created under the “SIS” Act whose full name is – Superannuation Industry (Supervision) Act 1993 (or “SISA”) and can be in two main forms

       Multiple member SMSF

      2- 4 members

       Single member SMSF – 2 possibilities

      2 trustees (you and one other non-employee)

      Or have a Corporate trustee with you as sole director

NO member can be an employee of another (unless family)

NO Trustee can be paid for services

An important part of the law is to recognize and abide by the “Sole Purpose Test” – that an SMSF is established  to pay Retirement Benefits – the purpose of this is to ensure the super assets/money are preserved and protected for retirement, and in the meantime both managed and invested wisely.

This means there are some restrictions on investments in related party assets, assets that can be acquired from related parties, and restrictions on personal use of fund assets.

The difference between a self-managed superannuation fund and other types of superannuation funds is that members are also trustees, or they are directors of a corporate trustee. This means they control the investments of the fund, the payment of their benefits and are ultimately responsible for the ongoing compliance of the fund.

There are two main different types of SMSFs, based on structure, that is, whether there will be a corporate (special super company) or individual trustees. Another difference is the number of trustees, single member or multiple, up to four trustees/members.

Corporate Trustee:

§  Four or less members

§  Each member also a director of the company who is the trustee itself

§  No member an employee of another member unless related

§  Corporate trustee, nor any director is paid for services related to the fund

Individual Trustee:

§  Four or less members

§  Each member is a trustee

§  No member an employee of another member unless related

§  No trustee is paid for services related to the fund

Single Member Funds come in Two Forms:

§  With corporate trustee, member must be sole director of the corporate trustee, or one of two directors either related or not an employee of each other

§  Two individual trustees, one a member and the other either related or any other person who does not employ them

See ATO: Setting up a self-managed super fund  or NAT 71923 Pg 6-7

Interested to know what self-managed super (SMSF) is all about, and if it is for you? Come to a FREE seminar with bonuses every month  Self Managed Super Fund Roadmap (all you need to know) for the next monthly event, see 1 SMSF – FREE Seminars or call us 0407 361 596


About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
This entry was posted in 2 Past Newsletter Topics, SMSF Basics - all to know, Superannuation General and tagged , , , , . Bookmark the permalink.

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