Self Managed Super Funds are not suitable for everyone and you should think carefully before deciding to set one up. Should you decide that an SMSF is the right vehicle for your super savings, you need to ensure the fund is set up and maintained correctly so that it is eligible for tax benefits and is as easy as possible to run.
In SMSF-Series-Podcast-2 (Episode 2), let’s join BCG’s very own Chris Reed and Sarah Power, as they discuss around the trustee of the fund, and then both will have a bit of a look at the deed, the investment strategy, and the fund itself.
We discuss the differences between Individual and Corporate Trustee.
Once your SMSF has been established and has its corporate trustee, it must control the investment of the contributions and fund earnings. The SMSF must have a trust deed that outlines the governing rules for the operation of the fund. The trustee must prepare and implement an investment strategy and you should ensure it is reviewed regularly and be making sure that the investment strategy covers off all the things that you want to do within your fund.
That’s not just from an asset point of view or what assets are we investing in; but just making sure it’s covering off on things like gearing, borrowings, all the different strategies you can actually put in place.
The trust deed should be reviewed regularly to accommodate changes in superannuation, taxation, estate planning and other laws that affect superannuation, as well as the potentially changing circumstances of the fund members and beneficiaries.
It cannot be over-emphasised, the importance of one getting a good deed in the first place; but then also keeping the deed current, keeping it up to date. The investment strategy of the fund, is another requirement of the fund, required by the regulations for the fund to have an investment strategy. It’s a requirement of the regulations that the investment strategy’s reviewed regularly.