SMSF advice

The question worth asking first

An SMSF is a superannuation fund you run yourself. You become a trustee, you make the investment decisions, and you carry the legal responsibility for the fund meeting its obligations. The ATO's guidance on self-managed super funds is clear that the responsibility sits with you even where you pay someone to help.

That is the real question. Not whether an SMSF can do something your current fund cannot, but whether the control is worth the obligation in your case.

What it costs to run

An SMSF carries fixed annual costs — administration, an independent audit, the ATO supervisory levy, and often actuarial certificates once the fund is paying a pension. Those costs do not scale down for a small balance, which is why a fund that makes obvious sense at one balance makes very little at another.

We will give you the actual figures for your situation rather than a range, and if they do not stack up we will say so.

Establishment done once, properly

Setting up a fund involves a trust deed, trustee structure, an investment strategy, registration and the rollover of existing benefits. The decisions made at establishment — individual trustees or a corporate trustee, in particular — are ones you live with, and changing them later costs more than getting them right at the start.

A corporate trustee costs more to establish and is usually easier to live with, especially where members change. We will explain the difference rather than defaulting to one.

Property inside the fund

An SMSF can borrow to buy property, but only through a limited recourse borrowing arrangement, and the rules around it are strict. The fund cannot borrow to improve a property. Related-party transactions are heavily restricted. The asset has to be held in a separate holding trust. Getting any of it wrong can make the arrangement non-compliant, and the consequences of a fund losing complying status are severe.

This is the part of SMSF work where having the accounting, the lending and the advice under one roof genuinely changes the outcome. Sal's House arranges SMSF loans and does the fund's administration and compliance; the strategy sits here. One conversation rather than three.

The trustee obligations are not decorative

You will need an investment strategy that is reviewed regularly, assets held in the fund's name and kept separate from your own, an annual audit by an approved SMSF auditor, and records kept for the required periods. The ATO applies real penalties, including to trustees personally.

None of this is a reason not to run a fund. It is a reason to be sure you want to before you start.

Winding up

Circumstances change — a relationship ends, a member dies, the balance falls, or the administration simply stops being worth it. Winding up a fund properly means dealing with the assets, the final return, the audit and the rollover in the right order. It is more involved than closing an account, and doing it badly creates tax outcomes nobody intended.