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SMSF – Trustees & Members

What is a self-managed superannuation fund (SMSF)?

A superannuation fund is a tax structure (like a company, trust or partnership) but one that has a specific purpose – it is designed to be used to save for retirement. An SMSF is simply a special type of superannuation fund. The difference between an SMSF and other types of superannuation funds is that generally, SMSF members (trustees) are also the people in charge of the fund. This means that if you choose to have an SMSF, you and your fellow trustees have complete control over how it is run, what investments are made and what other suppliers such as administrators, insurance companies etc. it uses.

There are two types of trustees for an SMSF:

  1. Individual Trustees
  2. Corporate Trustee

To choose the structure, we recommend you discuss this with an SMSF professional – your accountant or financial advisor.

The below table shows the comparison between the two types of trustees: –

Some SMSF are single member funds – sometimes this occurs due to the passing of a member.  The requirements for single member funds are slightly different.  They are shown in the table below.

All assets held by an SMSF must be kept separate from any assets members hold personally.

Change of trustee is quite costly and time-consuming in the case of an individual trustee.  However, with a corporate trustee, these changes are easier usually little or no cost involved.

(Source: )

Record Keeping

No one is going to disagree – good record keeping is essential for any SMSF. But as the years click over and more work is undertaken online, it begs the question – do we still need to keep all those ‘old records’?

There are some good reasons to.

Superannuation law requires trustees to retain records, often for minimum time frames (some quite long!). Documents include accounting records (5 years), trustee minutes (10 years), records of changes of trustees/directors and consents to act (10 years), Trustee Declarations (at least 10 years and whilst remain as a trustee/director) and member reports (10 years). 

The ATO places such importance on record keeping that they require the fund’s auditor to check every year whether these records are being retained. The ATO also could impose administrative penalties on SMSF trustees for failing to satisfy these requirements.

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(Source:  Heffron)

New Bring forward rules from 1 July 2020 finally legislated

New rules allowing individuals to initiate a “bring forward” of future years’ non-concessional contribution caps up until the year they turn 67 (rather than 65) have finally passed. They will apply from 1 July 2020. What quirks should we watch?

First the change in a little more detail. 

At any given time, non-concessional contribution caps depend on two factors:

The size of an individual’s total super balance, and

Whether or not they are allowed to initiate a “bring forward” and use future years’ contribution caps in a current year. 

Assuming the total super balance isn’t a problem (more on this below), whether or not someone is allowed to initiate a bring forward depends on their age. 

To continue reading please click here

(Source:  Heffron)


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