If you set up a self-managed super fund (SMSF), you’re in charge – you make the investment decisions for the fund and you’re held responsible for complying with the super and tax laws. It’s a major financial decision and you need to have the time and skills to do it. There may be better options for your super savings.
An SMSF must be run for the sole purpose of providing retirement benefits for the members or their dependants. Don’t set up an SMSF to try to get early access to your super, or to buy a holiday home or artworks to decorate your house. These things are illegal.
SMSFs Can Facilitate All Major Superannuation Functions including:
- • accepting new superannuation contributions
- • housing superannuation funds received from a change in employment, and
- • paying a retirement income.
Considerations in Establishing SMSFs
Members
A SMSF must have between one and four members. No member is allowed to be an ‘employee’ of another member unless related.
The sole purpose test
To meet the sole purpose test, SMSFs must be established for:
- • benefits to members upon retirement; or
- • death or ancillary benefits to members.
The trustee of a regulated superannuation fund must comply with the sole purpose test to be eligible for the taxation concessions available to a c complying superannuation fund.