Have you ever thought of owning a beautiful piece of art or another form of collectible, yet have never had the money? A self managed super fund (SMSF) may be able to assist you to achieve your goals. You should consult an experienced Sydney Financial Planner or Chartered Accountant, before embarking on the path towards a Self Managed Super Fund (SMSF).
A Self Managed Super Fund, often called a SMSF, is a superannuation fund, for 1-4 individuals, run by the fund members or under their supervision directly, whether as trustees or as directors of a company that acts as trustee. This enables the fund members to make direct decisions on how the fund operates and what investments can be chosen, as long as that investment meets the sole purpose test defined by the Australian Tax Office.
Benefts of a Self Managed Super Fund (SMSFs)
Some of the benefits inherent in operating a Self Managed Super Fund (SMSF) may include:
- That the owners are able to be more involved in the investment process, ensuring that your superannuation fund better reflects your preferred investment allocation.
- SMSF funds are also able to purchase shares, property and other investment items.
Disadvantages of Self Managed Super Funds (SMSFs)
Some of the negatives may include:
- Due to the level of compliance required to maintain a SMSF, those with lower capital values may incur higher fees than those payable through traditional super funds
- Due to the stringent legislation, the amount of time required to be invested into ensuring that the SMSF remains compliant is great. More time and effort is required, as compared to a traditional super fund
- Failure to comply with regulations can lead to severe penalties and fines imposed by the Australian Tax Office (ATO)
- There are limitations on how you can use your investments. A common mistake that can leads to your funding being non-compliant when investing in property through superannuation is that many people allow family members, whether children, brothers, sisters or cousins, to live in the property at a reduced rate to assist them financially. This can lead to substantial fines and penalties.
The law provides a range of stringent and austere requirements that must be met. A breach of the law can lead to heavy and severe repercussions. It is therefore vital that you consult a Chartered Accountant before you embark on such a path.
Our Financial Advisors work in cohort with Chartered Accountants, Tax and SMSF Lawyers and Mortgage Brokers. With a multi-disciplinary team offering a total service, Navado provides its clients with a unique chance to take advantage of expertise and skill across an array of professional areas. For more information, explore our website or contact our office on (02) 9233 4048.
Navado Financial Advisors Pty Ltd is a Corporate Authorised Representative of Lifespan Financial Planning. A.B.N. 23 065 921 735. AFSL 229892. This webpage (and any material or wording appearing on this webpage) is provided for information only and constitutes general financial product advice. It does not take into account your objectives, financial situation or needs and you should therefore consider the appropriateness of the advice, in light of your own objectives, financial situation or needs before acting on this webpage. When making decisions about any financial products you should obtain a copy of and consider the Product Disclosure Statement for that product before making any decision. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.
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