Lots of people get excited by the thought of setting up a self managed super fund, and we are certainly big fans of them. But it’s certainly not for everyone.
We spend considerable time with our clients, not just those from Melbourne, but all over Australia, exploring all of the options and education them on the alternatives before making a recommendation to establish a SMSF.
A well-thought out smsf investment strategy that suits your situation is vital when considering this as an option.
We feel too many people are seduced by slick salesmen with properties, loans, incorrect smsf strategies and get rich quick schemes – and are very sceptical of these arrangements as a result. But a smsf setup that is tailored to your needs can certainly work in your financial favour, however a sound strategy is required to ensure it works for you.
Here are some key points:
Self Managed Super Funds allow up to 4 members and are governed by the same type of rules that apply to public super funds.
SMSF’s certainly give the members absolute control and discretion over how they invest their retirement nest egg, but this does not mean you cannot seek professional assistance from the team at GNS. If you need guidance with the smsf setup process, book a consultation at our Ivanhoe offices, we’re here to help.
Being able to make an investment in Term Deposits, listed shares, managed funds and residential/commercial property comes with a lot of attractions, particularly if you are borrowing to invest or a small business owner looking to pay rent to your own SMSF.
Because the government gives so much flexibility to SMSF’s, you are required to lodge an annual tax return, prepare financial statements and most importantly, subject yourself to an annual compliance Audit. This is where the GNS team can further assist you in meeting your compliance obligations.
Generally, as part of our investment strategy for you, we would not recommend setting up a SMSF with less than $250,000 as the annual compliance cost would outweigh the benefits in many situations.
Besides the flexibility of investment and control that we mentioned earlier, another big advantage that comes with a SMSF is the benefit of TIMING.
Having control over when to sell an asset and trigger a Capital Gains Tax event can have a major impact on your overall performance.
Eg- selling an asset inside 12 months will not allow access to the CGT concessions, similarly selling an asset on 29th June will mean the tax is payable this year, whereas selling on say 2 July means you can hold onto an investment for longer before paying the CGT to the ATO. The same principle holds true selling before the commencement of a pension where Capital Gains Tax applies compared to waiting until after a pension has commence and no CGT is payable.
The benefit of timing cannot be underestimated as a great way to enhance your returns and should be a consideration in your assessment of the pros and cons of a SMSF.
Based in Ivanhoe, in the north-east of Melbourne, the team at GNS Group, spanning Financial Planning, Tax Accounting and Audit have all of your needs met and can answer all of your questions regarding these types of financial services, including the self managed super fund property investment rules, as we are members of the SMSF Association.
Our strength lies in our ability to tailor an investment strategy that is best suited to your needs.