Benefits associated with having a Self-managed superannuation fund (SMSF) is the ability to select the fund’s investments and manage your super resources as you see appropriate. In this article, we will outline the benefits of owning an SMSF:
Your Investments, Your Choice
The first benefit of having an SMSF is the ability to invest in a variety of domestic and foreign assets. These domestic and international assets include:
- shares of public and private companies
- unit trusts (listed and unlisted)
- residential and commercial real estate (both directly or indirectly)
- investments in art, bullions and cryptocurrencies
- managed portfolios
- cash and term deposits
Better Timing & Flexibility
Having an SMSF provides you with more control over the timing of the fund’s investments in terms of buying and selling. Being able to have a quicker response with your fund’s portfolio adjustment due to sudden changes in local or international investment markets is imperative.
An SMSF is allowed to have up to six members, which may provide access to wholesale investments and benefits through the pooling of superannuation savings between members.
Manage Tax Efficiently
As the superannuation is a tax-advantaged structure, you have greater control over the fund investment decisions. The taxable income of an SMSF is usually 15%, but any income received on investments that support a pension in the retirement phase is tax-exempt.
Estate Planning Benefits
SMSFs offer great flexibility when it comes to a member’s estate planning needs. An SMSF provides members with the advantage of non-lapsing binding death benefit nominations. Other funds may restrict it to death benefit nominations that require updating every three years or earlier. SMSF members may also have greater flexibility in the specifications on how death benefits are to be paid, whether in cash or by transferring the fund’s investments.
“With Great SMSF Benefits, Comes Great Responsibility Too” – Mint Super Audits
Despite the benefits of having an SMSF, you’ll still be required to comply with strict laws and regulations that comes with it too. You will be a trustee of your SMSF, which means that you are liable for all decisions made in regards to the fund. This includes accountability for the investment decisions and the measurement that the SMSF complies with the Superannuation Industry (Supervision) Regulations 1994 (SISR) and Superannuation Industry (Supervision) Act 1993 (SISA). Be sure to avoid common mistakes, weigh the pros and cons, speak with investment advisors, along with SMSF auditors to find out more about SMSFs – today!