What Is A Self-Managed Super Fund (SMSF)?

What Is A Self-Managed Super Fund (SMSF)?

Introducing Self-Managed Super Fund

SMSF, also known as Self-managed Super Fund, is a fast growing sector or the superannuation industry. More Australians are taking control of their superannuation and are closely working with the financial advisers for advice.

In an SMSF, the members are also the trustees. Which means that, the members run the SMSF for their benefit and a responsible for the investments made and compliance to tax laws.

When you run an SMSF you:

  • Directly control your superannuation
  • Get individual attention and advise from a financial adviser
  • Have greater investment choices and can improve performance potential
  • Benefit from tax savings and tax minimisation strategies
  • Save on costs

Direct Control

Running your own Self-managed Super Fund gives you the benefit of flexibility and control. To suit your individual circumstances, you can customise your savings and investment strategies. You are given the power to determine the investments that are best for your circumstances. You have the authority to decide whether to invest, buy, sell or hold an investment. You can also design and implement your own investment strategies that suit you best.

Individual Attention and Advice

As a Self-managed Super Fund you directly deal with an investment adviser. He may be somebody you know and trust for good quality investment advice or recommendations.

Greater Investment Choice

As an SMSF, you will have access to a greater variety of investments. This may include direct shares, managed funds, derivatives, property and so on. Having access to several investment options with the individual attention and advice from a reputable investment adviser, it is likely that the value of your superannuation savings will grow fast.

Tax Savings

Tax income received from investments in Self-managed Super Fund is at a maximum of 15%, while capital gains tax is at a maximum of 10% for assets held greater than 12 months.

If the fund is paying an account based pension, no tax is payable on the investment earnings associated with the pension. $0 tax on investment income and $0 tax payable on capital gains for a pension account.

You might also get refund cheques from ATO yearly, through the refund of franking credits if you have invested in direct shares.

However, there is a limit to the number of assets that an SMSF is allowed to transfer into retirement phase account tax-free.


The cost of managing your own SMSF fund is significantly less but gives you more flexibility than with industry funds. Management and administration costs are generally fixed and are not linked to the value of the superannuation.

What Is Involved In A Self-managed Super Fund?

When you set up an SMSF you need to decide on who will the fund members and trustees be. You also need to establish the trust and trust deed. You should also set up a bank account, register with ATO, create an investment strategy and a plan for when the Self-managed Super Fund ends.

Once you have set up the fund, you should consider rolling over existing super funds, organise employee contributions, accept contributions within limits, make investments without breaking rules, review the investment strategy regularly and document and maintain records within a period of 10 years.

Each year, as a trustee, you need to value assets, prepare accounts and financial statements, appoint an SMSF auditor, lodge an annual return, pay the SMSF super fund levy and pay any tax that is due to be paid.

When payment should be made, you need to decide whether any assets need to be sold and ensure minimum payments are made each year. You also need to appoint an actuary, withhold tax and give payment summaries to members and to ATO.

When the fund is finished, you need to get a final audit, and lodge a final return. You also need to pay any outstanding tax and payout or roll over all of the assets.

Before getting an SMSF, ask yourself if you can do this and manage it on your own or if you are prepared to pay professional SMSF specialists to manage for you. However, even if you have professional help, SMSF trustees are ultimately responsible for the fund. Seek professional advice if an SMSF is right for you.

Kingston Knight Audit are the Auditor Melbourne experts to contact when dealing with your trust account audit, SMSF Audit, financial statement audit,  and internal audit requirements. Contact us today, Kingston & Knight Audit offers a free telephone consultation to establish how we can best help you achieve the assurance and compliance you require.

Call our Melbourne team today on 03 9088 2242, or email us via  audit@http://kingstonknightaudit.paulkanewebdesigns.com/wp-content/uploads/2016/12/business-accountant-melbourne.jpgknightaudit.com.au.