Setting up a self-managed super fund

Not at all. While we do believe that if you're taking the time to set up an SMSF, you should take a keen interest in how it's run and gradually educate yourself more each year, the beauty of an SMSF is that you can have as little or as much input into your investment decisions as you like.

Our advisers are here to help you run your SMSF in a way that will best benefit you and your family, now and in the future.

You can choose from two main types of contributions:

1. With the first, each member makes a tax-deductible contribution of up to $25,000 annually (including whatever amount your employer contributes to you).
2. With the second, each member can also contribute $100,000 per year as a non-tax deductible contribution.

Additionally, you can make several other special contributions. For example, if you sell a small business, you can contribute up to $500,000 of the capital gain to reduce your tax.

Yes, you can. You may invest in residential, commercial or industrial property. Commercial or industrial property may be leased back to your business. If you invest in residential property, it must be leased to an unrelated party.

Investing in property can be a good option for some SMSFs. However, you must carefully consider whether this is the best strategy for your retirement planning. In recent years, the interest rates and fees for property loans have increased dramatically. Also, for high-income earners, it can make more sense from a tax perspective to invest in property outside super.

Investing in Australian shares in an SMSF can be a great option due to the additional franking credits available.

Franked dividends are dividends or profits paid to shareholders by a company that pays company tax in Australia on part or all of the profit distributed as a dividend.

Generally, a listed company pays tax at a rate of 30 per cent. A shareholder who receives a franked dividend can claim a tax offset for the franking credits (otherwise known as imputation credits) attached to the franked dividend.

In practice, this would mean that if your SMSF owned BHP shares and a $1,000 dividend were declared, you would receive $700 as cash, and BHP would pay $300 (30%) in tax. If your SMSF is in pension mode on a 0% tax rate, you would then receive the $300 tax as a refund when you lodge your tax return.

SMSFs offer great flexibility with your estate planning needs. A member of an SMSF can make binding death benefit nominations (BDBN) that do not lapse — unlike many public offer superannuation funds, which tend to require binding death benefit nominations to be updated every three years.

A BDBN is like a Will for your SMSF. It allows you to direct your SMSF balance to the exact person you want to receive that money. If set up correctly, a BDBN is very difficult to challenge in a dispute.

Choosing between an individual trustee structure and a corporate trustee structure can impact how your fund is managed and administered. Here are the key differences:

Individual trustee structure

• Trustee requirements:some text
  • Requires at least two individual trustees, and all members of the fund must be trustees.
• Asset ownership:some text
  • Fund assets are held in the names of the individual trustees, which means ownership changes if membership changes.
• Liability:some text
  • Trustees face unlimited personal liability, putting their personal assets at risk if the fund incurs liabilities.
• Administration:some text
  • Changing trustees can be administratively challenging, as it involves re-registering assets in the new trustees' names.

Corporate trustee structure

• Trustee requirements:some text
  • Involves a company acting as the trustee, with all fund members as directors of the company.
• Asset ownership:some text
  • The company holds the legal ownership of the fund’s assets, maintaining consistent ownership even if membership changes.
• Liability:some text
  • Offers limited liability protection, reducing personal risk for directors.
• Administration:some text
  • Simplifies management and succession planning, as the corporate trustee remains constant regardless of membership changes.