Self Managed Superannuation Funds – Benefits and Tips

Controlling your investments

Your existing superannuation scheme may allow you to manage your funds through a choice of property investment, shares and fixed interest funds. However, restrictions will often apply.

With a SMSF, you have greater flexibility and choice of where your money is invested. Options may include commodities such as gold, art work or other collectables, derivatives and direct property.

A further benefit to controlling your investments yourself is that doing so, gives you the option of being able to borrow, for investment purposes, from within your fund. This option may be particularly useful for small businesses to utilise their business premises for asset-protection, tenancy security and succession planning through their business premises.

Flexibility

Imaging having the flexibility to make adjustments to your investment portfolio when it suits you? With a SMSF you can! An SMSF gives you the freedom to respond to changes in market conditions and buy and sell investments when the time is right, according to your individual needs.

Pool your super with others

You can access further investment opportunities by pooling resources with up to three other members – This option is one to be considered when gearing.

Planning your estate

When making binding death benefit nominations, many superannuation funds require them to be updated every three years.

This is not the case with Self Managed Super Funds. Not only do your nominations not lapse, you can also specify how your death benefits are to be paid.

Tax management

With an SMSF, you can minimise or even eliminate your capital gains tax liability, by gaining control of the disposal of assets. This enables you to take into consideration tax such as imputation credits and the impact they will have on after-tax fund earnings.

Income earned through income streams which are wholly supported, such as pensions, do not attract any tax. With the current tax rate on superannuation earnings set at 15%, this is undoubtedly a huge benefit!

Grow your investment with property

You can grow your superannuation investment even further, by adding investment property – Yes, that’s right, you can own property through your SMSF.

This typically involves your fund acquiring a residential or commercial rental property. The property can only be leased to unrelated parties, as due to the in-house assets test, fund members or relative are not permitted to rent a residential property from within a SMSF.