Over the past years, the popularity of Self-Managed Superannuation Funds (SMSFs) has been steadily increasing, with good reason. An SMSF puts you in control of your growth and earning potential. But many Australians are unsure about starting one, or what its management entails. Here are some of the more important aspects of an SMSF you need to keep in mind when starting or managing one.
You’re in charge
When you set up an SMSF, you are the one in charge of making the investment decisions, but you’re also held accountable for complying with Australia’s superannuation laws and tax requirements.
An SMSF is regarded in Australian law as a “trust”, which means that all investments are made in the name of the SMSF, and are controlled by its trustees. The trustee structure can be set up in two ways; a corporate structure, where a company acts as the trustee and each member is a director; or an individual structure, where each member of the fund is appointed as a trustee.
All SMSF trustees are responsible for the growth of the fund, which means that as trustees, you are in charge of making investment decisions, and ensuring that you have an investment strategy in place. You’ll also have to adhere to legal requirements, such as maintaining proper records, preparing financial statements, completing tax returns and facilitating an independent audit of the fund.
You can, and should get help
Being a trustee of an SMSF is a big responsibility, and not many trustees will have all the necessary skills to run the fund on their own. This means that the help of a professional financial advisor is a welcome idea, if only for advice and to keep the trustees abreast of the ever-changing legal landscape that affects SMSFs.
We recommend you contact a professional accounting firm that has years of experience in assisting our clients with the creation and management of an SMSF. Along with a financial planner, Stones Sharp can provide the necessary professional advice you would need regarding your SMSF.
If you want to find out more about our SMSF services, feel free to read more here, or contact us today.