What You ought to Know About Self-Managed Superannuation Funds
Posted by Aaeesha on February 19th, 2015To build long term wealth and provide income in retirement, a superannuation fund is a good idea. Usually government recognizes this and provides special tax concessions for earnings and contributions of complying funds. Self-Managed Superannuation Fund (SMSF) is a popular choice among Australian employees and most of the self-employed have embraced this concept in large numbers. SMSF represents over 30% of the Australian income for retirement and is a way of growing and holding your money to provide income after retirement. If you have a reasonably good retirement savings, then self-managed funds may suit your needs.
The biggest reason, statistically people choose self-managed funds is to have a control over their superannuation investments. Investment through Self-Managed Superannuation Fund is different from investing via a large public offer fund. In a retail superannuation fund, investors must choose from the restrictive range of investments that the trustee offers.
In such kind of self-managed funds, you are responsible for the choice of investment and are making a selection from a much bigger ?universe? of investments. In certain circumstances, it is also possible to move investments you already own into your SMSF. The significant control and flexibility of such funds, along with the tax benefits that it offers can create a great opportunity to invest long term and build wealth post retirement while paying less tax.
Once your funds are legally established and all your trustees have signed a trustee declaration, you will have to register your funds with the Australian Taxation Office. When registering your funds, you can elect for it to be regulated. For your funds to receive tax concessions and to be a complying fund, you need to elect for it to comply with the super laws and to be regulated.
Usually non-regulated funds are not allowed tax concessions, and the employers, members can?t claim any deductions for contributions they make to the fund. An election has to be made within 60 days of establishing self-managed funds, this is done when your fund is established by signing the trust deed and after the first contribution is made.
All registered funds are allocated a tax file number and Australian Business Number after this. Once this is done, then GST lodgement is done. Most of the self-managed superannuation fund?s don?t need to go for GST lodgement because such funds mainly make input-taxed sales which usually don?t count towards GST turnover. SMSF with an annual GST turnover of more than $75,000 must lodge a GST. Annual GST turnover does not include; grow income from financial supplies, contributions and income generated outside Australia or residential rent. GST lodgement can be done even if your turnover is below the threshold. GST lodgement can be done annually if you are not required to lodge GST and you have not elected to pay GST by instalments as advised by the Australian Taxation Office.
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About the AuthorAaeesha
Joined: May 27th, 2014
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