Mon. Apr 22nd, 2024
self managed funds

We all will retire in our journey towards the end of our lives. We all invest and try to secure our future in some way or the other. Some invest in mutual funds and schemes, and some support the self-managed super fund. Out of all of them, the most lucrative one is the self-managed super fund (SMSF). It is a super private fund that the individuals manage by themselves. When you manage your super fund, you put the money into your SMSF and choose the investments and the insurance. Your SMSF can have one to no more than six members. As a member, you are a trustee of the fund, meaning you are the custodian of the funds.

SMSF is a superannuation trust structure that will benefit all its members upon retirement. You may ask then, what is the difference between the SMSFs and other super funds? In SMSF, members are also the fund’s trustees, while in superfund, they are not. SMSFs can have between one and four members and offers greater control than trustees have. They get to control the funds based on their needs. You may have many questions. The first question would be, how dies an SMSF work?

How does an SMSF work?

SMSFs are established to provide financial backing to members when they retire or in case of death. They have their Tax File Number (TFN), Australian Business Number (ABN), and bank account, allowing them to receive contributions. All investments are made in the fund’s name and controlled by the trustees. There are two trustee structure options:

  • Corporate Trustee – A company acts as the trustees, and the members serve as directors. It is a structure that allows simpler registering of assets, providing administration efficiencies and flexibility in membership.
  • Individual Trustee – As the name suggests, each member is appointed as a trustee, with a minimum of two trustees required. Everyone has their rights they can invoke to make decisions, and there are many other responsibilities that we are going to discuss down below:

SMSF trustees have a lot of responsibilities. They are responsible for making investment decisions and ensuring the implementation of an investment strategy and are required to maintain records, provide financial statements, and organize an independent audit. All these are complex, and for these reasons, many trustees hire SMSF Crypto Specialists to help them manage their accounting, auditing, and tax reporting, as well as provide financial and investment suggestions. One thing to note here is that the trustees are solely responsible for everything even though they have hired someone else.

How New Wealth Venture Helps you?

Our SMSF Accounting team support SMSF trustees with everything from preparing financial statements to filing tax returns. We help them through an independent annual audit and actuarial certificates and liaise with the Australian Tax Office (ATO) and the Australian Securities and Investments Commission (ASIC).

By Manali