A Superannuation fund is a way to save for your retirement. In Australia, it is compulsory for an employer to pay 9% of a worker’s salary into a super fund, and the members may make a voluntary contribution to increase the investment. The trustees of the fund will invest the money in accordance with an investment strategy. If you wish to take control of your superannuation investments you may wish to consider establishing a Self Managed Superannuation Fund (‘SMSF’).
SMSFs operate generally in the same manner to that of a “general” superannuation fund. The fund will be held by, and controlled by trustees. However with a SMSF, all beneficiaries must also be trustees (or directors of trustees if it is a corporate trustee). The powers of a SMSF trustee have expanded significantly in the last few years, including the power to borrow money. Feel free to contact us on (02) 9521 2222 and our commercial lawyers can explain to you the rights and obligations of the trustee in further detail.
Advantages of a Self Managed Superannuation Fund
The general consensus is that as SMSFs have higher administration fees compared to other forms of managing your investment (for example, discretionary trusts) it is generally suited for people with more than $200,000 in their superannuation account and who are willing to manage an investment.
The advantages of setting up a SMSF is that you (as the trustee) will have complete control over your investments, provided that it is in accordance with the relevant laws. The discretion to choose your own investment strategy will provide you greater flexibility and control into your financial affairs as a whole.
Further, there may be various tax benefits associated with investing through your superannuation fund including reducing your income tax liabilities on your investment. As you can have up to five members, SMSF may be a great way to implement your estate planning as well for your family. If you are a small business owner it is possible to own your business’ real property which may assist in funding and or cash flow problems.
How Prime Lawyers can assist you
Our commercial lawyers can assist you in:
-
Advising on the structure of the fund, obligations, rights and restrictions of trustees and beneficiaries so that you may make an informed decision.
-
Setting up the structure including drafting SMSF Deeds, Trustee Declarations, incorporate a trustee company.
-
Update your existing SMSF deed. Powers that may be conferred in law may not be exercisable by you if your trust deed does not allow it. This may mean significant tax consequences and/or breach of your trustee duties.
-
Changing trustees of the fund. If you have been operating your SMSF for a few years you may benefit from reconsidering the entity that is to be the trustee.
-
Drafting documents with respect to borrowing money including establishing custodian trustees and drafting loan agreements.
If you require advice on a Self Managed Superannuation Fund, feel free to call us on (02) 9521 2222 and speak with one of our commercial lawyers today. You can also send your enquiry online now and we will call you shortly.