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An ever-increasing number of Australians are considering self-managed superannuation funds (SMSFs) because of the greater degree of control they allow over their investments. According to the Australian Taxation Office (ATO), there were more than 470,000 self-managed superannuation funds in existence as of June 2012, with assets in excess of $450 billion, and these numbers have been on the rise since.

As managing partner for Summit & Crowne, I’ve been having more conversations with Australians who have a high interest in acquiring single-family rentals in the United States, with solid returns using SMSFs.

Before understanding how you, as an Australian, can benefit using an SMSF, though, let’s look at what a self-managed superannuation fund is.

What Is A Self-Managed Superannuation Fund?

A self-managed superannuation fund (or SMSF) is a special entity that holds your superannuation savings, which you have to run yourself. The main purpose of an SMSF is identical to other types of superannuation funds, namely to build wealth for the members for retirement.

For a superannuation fund to be considered an SMSF, it has to meet certain conditions. One of the first conditions an SMSF must fulfill is that it cannot have more than four members. All the members must be trustees of the fund and vice versa.

In other words, all of the fund’s members are responsible for the operation of the fund, which includes investing assets, paying out benefits and ensuring that all the administrative and compliance requirements of the fund are met. If the trustee of the fund is a company, then all the members of the fund must be directors of the company.

There are other requirements an SMSF must comply with and they include:

  • The creation of a trust deed that is in compliance with the Superannuation Industry (Superannuation) Act 1993 (SIS Act);
  • A member of the fund cannot be employed by another member of the fund unless they are related;
  • Trustees cannot be paid for the services they provide;
  • If a person is not a member of the fund, they do not have the right to be a trustee or director of the trustee company.
  • More rules can be found here.

While SMSFs can be established with only one member, they have to comply with slightly different rules. Thus, a fund with a single member must have two separate trustees. If the trustee of the fund is a company, then the member must be the sole director of the company or one of only two directors. The second trustee or director of the trustee company must be someone who is related to the member or can be any other person as long as they are not employed by the member.

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An ever-increasing number of Australians are considering self-managed superannuation funds (SMSFs) because of the greater degree of control they allow over their investments. According to the Australian Taxation Office (ATO), there were more than 470,000 self-managed superannuation funds in existence as of June 2012, with assets in excess of $450 billion, and these numbers have been on the rise since.

As managing partner for Summit & Crowne, I’ve been having more conversations with Australians who have a high interest in acquiring single-family rentals in the United States, with solid returns using SMSFs.

Before understanding how you, as an Australian, can benefit using an SMSF, though, let’s look at what a self-managed superannuation fund is.

What Is A Self-Managed Superannuation Fund?

A self-managed superannuation fund (or SMSF) is a special entity that holds your superannuation savings, which you have to run yourself. The main purpose of an SMSF is identical to other types of superannuation funds, namely to build wealth for the members for retirement.

For a superannuation fund to be considered an SMSF, it has to meet certain conditions. One of the first conditions an SMSF must fulfill is that it cannot have more than four members. All the members must be trustees of the fund and vice versa.

In other words, all of the fund’s members are responsible for the operation of the fund, which includes investing assets, paying out benefits and ensuring that all the administrative and compliance requirements of the fund are met. If the trustee of the fund is a company, then all the members of the fund must be directors of the company.

There are other requirements an SMSF must comply with and they include:

  • The creation of a trust deed that is in compliance with the Superannuation Industry (Superannuation) Act 1993 (SIS Act);
  • A member of the fund cannot be employed by another member of the fund unless they are related;
  • Trustees cannot be paid for the services they provide;
  • If a person is not a member of the fund, they do not have the right to be a trustee or director of the trustee company.
  • More rules can be found here.

While SMSFs can be established with only one member, they have to comply with slightly different rules. Thus, a fund with a single member must have two separate trustees. If the trustee of the fund is a company, then the member must be the sole director of the company or one of only two directors. The second trustee or director of the trustee company must be someone who is related to the member or can be any other person as long as they are not employed by the member.

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