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What is an SMSF?

The main difference between an SMSF and other superfunds, like industry & retail funds, is that the members are also the trustees of the SMSF. This means that the members are the ones that make the decisions for the superfund, meaning you choose where to invest your funds.

They also differ in the following ways:

  1. An SMSF can only have a maximum of 4 fund members;

  2. There can be no payments made to the trustees for services provided;

  3. All investments are held in the name of the trustee (or a corporate trustee).

What are the advantages of an SMSF?

The major advantages are:

  1. Basically unlimited investment opportunities. You are not restricted to a set level of investments provided by your superfund.

  2. The ability to structure your super in order to reduce income tax on investments.

  3. Ability to borrow inside your SMSF to purchase large assets like property.

  4. You can have 4 fund members in the fund reducing the overcall cost of a superfund per member.

  5. You can see all investments that you have made.

  6. The ability to structure your super in order to reduce income tax on investments.

  7. Flexibility in setting up pensions and transition to retirement strategies.

  8. Ability to transfer personally owned assets like shares into your SMSF.

Who is an SMSF best for?

Deciding whether to open up an SMSF or keep your super elsewhere can often be a difficult decision. Being a trustee of an SMSF comes with plenty of responsibilities and the ATO are cracking down on members opening up an SMSF for the wrong reason. Therefore, who is a SMSF best for? Generally, there is no hard or fast rule but the following could suggest that you should think about opening an SMSF:

  1. You have an existing superfund balance of at least $200k or you could contribute from the outset to increase your balance above $200k.

  2. You want to have more control over how your balance is invested.

  3. You would like to invest a portion of your SMSF into property.

  4. You have a reasonably sized super balance and would like to minimise income tax and capital gains tax on your superfund assets.

  5. You have a large super balance and would like to minimise administration and investment fees.


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