For the Self-Managed Super Fund (SMSF) Trustee, there are certain rules that must be followed to ensure the SMSF super fund stays compliant regarding what you can invest in. Here they are and the Regulations or rule from the SIS Act (Superannuation Industry (Supervision) Act 1993) that it comes from.
Key Investment Rules
- Ensure Fund-Ownership of assets is secure (preference in trustee name (individual(s) or corporate name) – S52(2)(d)
- Invest following the written Investment Strategy – Reg 4.09
- Cannot lend money or financially help others or members – S65
- Cannot buy assets from members or related members or entities (except shares and securities at market value, business real property) – S66 & S69-71E
- Must be no charge over any assets in the fund (recourse) S67A-67B & Reg 13.12–13.13
- Meet Sole Purpose Test – Decisions that will provide for retirement – S62.
SFs can invest in various asset classes including:
- Shares, Options, CFD’s ,Covered Call Options
- Property – Residential and Commercial
- Managed Funds
- Term Deposits and Cash
- Government Bonds
- Exotic Assets (with a proviso***) such as:
- Art and Collectables
- Cars, Wine
- Antiques, Jewellery
***The Main Issue is you cannot USE/Enjoy them YET – this would break the Sole Purpose Test and is a breach of the SIS Act – S62 & Reg 13.14.
Interested to know what self-managed super (SMSF) is all about, and if it is for you?
See the slides SMSF Roadmap Overview.
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