Self-managed superannuation is a very popular means of providing for retirement. According to statistics released in December 2014, self-managed superannuation funds (SMSFs, also known as D-I-Y funds) had assets of $557 billion – 30% of the total funds in Australian superannuation.
An SMSF is a superannuation fund with a maximum of four members, which has elected to be regulated by the Australian Taxation Office instead of by the Australian Prudential Regulation Authority (APRA). In an SMSF the members jointly control the fund, either as trustees or directors of the trustee company. Another rule is that one member may not be the employee of another member unless they are related. The member-trustees may not be paid for their services.
SMSFs are subject to the Superannuation Industry (Supervision) Act 1993 (SIS Act), which tightly controls how superannuation money may and may not be invested. The main rule is the sole purpose test – superannuation money must be used for the sole purpose of providing for your retirement and may not be used for any other purpose or accessed before retirement or death. There are serious consequences for breaking the superannuation investment rules, and your fund must be audited every year by an independent auditor who is required to report any breaches to the Tax Office.
At Astrolabe Accountancy we are familiar with all the investment rules and can help you stay out of trouble! We can handle the administration and record-keeping of your SMSF, and prepare the financial reports and tax and regulatory return.
We also arrange the audit of your fund by a third-party SMSF auditor, and obtain an actuary’s certificate if your fund is partly in tax-free pension phase. We can also refer you to a financial adviser for investment advice.