The Self Managed Superannuation Fund (SMSF) is an accumulation fund. This means that amounts (including contributions, transfers and rollovers and accumulated earnings) are invested as you and your co-trustees see fit.
There are strict rules applying to these fund and can be viewed on the ATO Website, these are of course included in the trust deed we supply, with changes such as Interdependcy Relationships and Non Spouse Payment Splits
Membership
You must be in a fund which has no more than five members /trustee's; mostly related. As a trustee of the fund decisions, you might either accumulate investment gains and in some years losses. This will affect the balance of your member's accumulation account. As a trustee you have control and responsibility over the manner of the risks associated with the funds investments.
Costs and expenses of the fund may either be shared equitably between members by way of deduction from their accounts or, where the expenses relate to identifiable members only, from those members accounts.
The trustees cannot charge any fees for their services.
Costs and Statutory Reports
The fund must meet annual expenses, some will be determined on the turnover of the fund, others are statutory. These will be;
Accountancy; This is not nearly such a problem these days, with things such as software and proper recording procedures. Reporting Procedures is the Taxation Office's main target where complying funds will be targeted and penalty's imposed. Be Warned.
Auditing ; With a good accountant such as above he should be able to the above at reasonable charge;
Actuary; becomes involved something like a Valuer and are needed annually if the fund is paying or about to pay a "Pension" They play a role when the member's account has to be valued (i.e. assets) when retirement is close. They must asses wether the fund is Fluid enough to meet liabilities in regard to a member's pension entitlements and the overall fund's liabilities.
Benefit's.
The benefits available to you are set out in the trust deed. As a member and co-trustee of a self Managed Superannuation Fund you have control in the way funds are invested. There is generally an Investment Stage, an Accumulation Stage and the Pension Entitlement, which may still include your decisions for the prior stage,
With the agreement of your co-trustees, you can choose any form or combination of retirement benefits legally available. You have as much flexibility as possible.
Your primary form of retirement benefit is a "pension", as that term is defined in the Superannuation Industry (Supervision) Regulations 1994, however you may choose a lump sum benefit, Or a Pension or "commutate" your benefit into a number of choices, say to individuals, family's, or just to maintain a different rate of source income,
The types of pensions are set out in the "definitions" You may may make such things as Death Beneficiary Nominations as defined in the Deed.

Once you have reached "retirement" age of 55. ( or another age as specified in the Deed) you will be entitled to commence to take your Superannuation benefits, But there will be taxation implications . This mainly concerns the fact that it is not advisable to let your superannuation into the hands of anybody after your death except by way of the SMSF as the Tax office will charge a Capital Gains Tax much higher than what you have previously paid. so see your professional advisor
In relation to the benefits upon your death you may make two different nominations in regards to beneficiaries. The first is contained in your Application For Membership of the fund. This nomination is not binding on the trustee. Never the less the trustee must give this nomination serious consideration and would require good reasons why not to distribute in accordance with these wishes.

The second type of nomination is called a Binding Beneficiary Nomination. This nomination must meet certain forms, including being signed by two independent witnesses and at least once every three years being confirmed, modified or repealed by notice in writing from you to the trustee. The requirements to be followed in relation to Binding Beneficiary Nominations are yours;and bound in the trust deed. You should be aware that the trustee cannot deviate from the terms of a valid, binding nomination, even if the consequences of complying with it would result in higher tax than might be possible by other avenues,
or where you have changed your mind about the beneficiaries or the amounts they should receive. As such, it is important that you seek professional advice prior to submitting a Binding Beneficiary Nomination.
TaxationIncome from the fund:
For tax purposes the fund's income is divided into two components;
"Special Component" which includes the fund's special income. This is income such as private company distributions in the form of Distributions, Dividend's Etc,(There may be tax imputations involved) Non Arm's length income, being insurance dividends etc, These are offset by tax deductions relating to the special income or where no deduction is claimed as an expense for taxation benefits. Capital Gains tax should be properly handled and come under the Standard Component. The "Special Component" income should not be used in the normal couse of income for the Trust.
"Standard Component". This is the total of all Fund Income, less the special Component.
The Standard Component is taxed at the Concessional rate of 15% in the hands of the trustee. The Special component is taxed at 47%The Aust Tax Office. SMSF's lodge one return only each year.. This covers compliance fees and any taxation due on contributions and profits gained/realized for the period. The Audit report must accompany the lodgment and if applicable an Actuary's report. The Supervisory Levy of currently $45 but the fund will only be notified once from the Tax office.
Reasonable Benefit Payments SMSF must report after 14 days any commencement of payment or benefits, pensions, annuities or eligible termination payments Once the fund starts paying a pension no tax is applicable on income directly related to that pension.
Superannuation Surcharge All SMSF are required to report to the Taxation Office member contributions so that the Tax Office can calculate whether there is a member's superannuation surcharge applicable in the current year.31st October following the end of the These must be reported by financial year, But see below.
ContributionsThese are contributions made by your employer, yourself, spouse or anybody and are normally treated as contributions of capital and will not be included as the fund's income.
However; if the person making the contribution (such as your employer) is entitled to a tax deduction in relation to that contribution, then the contribution will normally be treated as fund income and be taxed , But also offset by Imputation credits.
There is a Superannuation Surcharge payable on contributions if your taxable income is higher than the relevant threshold;Currently between $99,000 to $121,000; (see Accountant)
Insurance
There is no obligation for the trustee of the Fund to take out life or other insurances on your behalf. Obviously, however, as a trustee of the Fund, you are in a position to make such application. As noted above, benefits can be paid out in similar circumstances to normal insurable events (death, total and permanent disablement, total and temporary disablement), however where the Fund has not undertaken insurance on your behalf, any payments will be limited to the value of your member's accumulation account.

SMSF COMPANIES! Of couse this is the best vehicle to manage a Fund which will last over many lifetimes. The Benefit arises in that the assets are held in the company name so that any transfers do not attract fees or stamp duties for changes in ownership etc. The ASIC fees for annual lodgement are also reduced to around $52 p.a. instead of $212.Again the Directors cannot charge for their normal services. It iws also possible to have a Single Director Compaany for the sole purpose of administering the Deed.

If you want a copy of the Deed please feel free to ring me,

Our SMSF Deeds are the latest updated Documents, Of course they come with Application Forms(these must include the Member/trustee's Tax file numbers)which have attached to them the Beneficiary Death Notice's,(4) which should be made with any membership request, The Deeds are Explicit on members duties and entitlements and membership such as Interdependancy Relationships, minors and infirm.

We will apply on your behalf for the Aust Tax Office's Numbers, ie. ABN's and Tax File numbers and Gst if applicable.

Pricing; Complete Bound Trust Deeds with one or two copies are $POA;(With all Membership Application Forms, Death Beneficiary Notices Etc.) Remember we apply to the ATO for Tax file numbers, Aust Buisness Number and Gst if required.(Included are Bank Account Opening Minutes, and Statement as to the Cheque signatories) The above are Express Post delivered and include Gst.

YOU WILL RECEIVE THE FOLLOWING;OUR FEES ARE $350.IF YOU WISH WE CAN EMAIL A DRAFT DEED FOR YOU INSPECTION, JUST ASK

Regards John Please dont hesitate to ring/E.Mail Etc 'on recommendations, john@shelfcoys.com.au