Interesting and Important Things to Know About Self Managed Super Funds (SMSF)
The trend of using SMSF or Self Managed Super Funds has gained a huge popularity in Australia in the past one decade. According to the experts, more and more people looking to use these Self Managed Super Funds are found searching for methods to plan their retirement using it. The concept is considered ideal for those who appreciate the idea being in control of finances and savings. However, this is the first time that you are dealing with this, there are several things that you should know and some of them are being discussed in this post.
• Self Managed Super Funds (SMSFs) are like other forms of superannuation.
• bThe major difference between this and other forms of superannuation is that members are the directors or trustees of the fund.
What is a trust deed?
• According to the experts, a truce deed is generally a legal document used to delineate the rules related to how the funds would be established and how they will be used.
• It is generally a written document that has all the fund’s objectives mentioned, but not limited to specifications of who will grant the membership.
• One more thing it mentions is how the money would be distributed.
• In whole, it can be said that with super laws, a trust deed generally defines and establishes the fund’s “governing rules”.
Some suggestions related to trust deeds
• Because it is a very important legal document, you should avail the services of experts in getting it prepared.
• One more tip is that it is not a bad idea at all to keep reviewing it on a regular basis and update it whenever you feel that it is required.
What is a trustee?
• According to the experts, a trustee or the director of funds is the person responsible for managing the funds.
• This professional has to act in the best interests and benefits of the fund’s other members too.
• As a trustee, make sure that the investments made in the Self Managed Super Funds are kept separate from your normal investments.
• Remember that the sole purpose of these Self Managed Super Funds is to provide you with benefits, once you have retired professionally.
What are the legal requirements?
• There are not too many of them, but experts say that whatever are there, they are all very important and need to be tackled really carefully.
• Experts say that as a trustee, you are responsible for managing the fund in keeping with the super laws and the trust deed.
• If this is not done as per the laws, there are chances that the tax concessions that you were thinking about availing will get affected.
Other than this, you might have to face some legal implications as well and the most common legal penalties imposed are –
• The declaration that your fund is non-complying, which will result in funds being taxed at a rate of 45%
• Your disqualification as a trustee
• Your removal as a trustee
• The freezing of assets