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Self-Managed Super Funds

Nouveau Wealth Management actively manages your Self Managed Super Fund to put you in control of your future. Our expertise and unique approach to client service ensures that your objectives are met in a safe, tax effective manner. Our strategic solutions are crafted to benefit both current members and their descendants.

Why use a self-managed fund?

Tax Effective

As with all superannuation funds, SMSFs offer significant tax benefits. When the fund is in accumulation phase these include:

  • Maximum 15% tax on investment income
  • Effective tax of 10% for any capital gains realised on assets held for at least 12 months
  • Tax concessions upon withdrawal

When the fund is in the pension phase, the fund is exempt from paying tax on any income or capital gains.

Additionally, you can control the timing of buy and sell decisions to reduce the tax consequences. For example, you could wait to sell shares once the fund has switched to pension phase, as it will be then exempt from capital gains tax.

If you hold Australian shares directly within the fund may this may also reduce the fund’s tax liability if the franking credits attached to dividends are used to offset earnings and contribution taxes.

Control

A SMSF allows the trustees to take responsibility for managing the investment strategy and the underlying investments for the fund.

A Family Fund

A SMSF can have up to 4 members, which allows four family members to be members of the same superannuation fund.

Investment Selection

A SMSF provides the trustees with the opportunity to invest in a near unlimited array of investments such as Listed Shares, Managed Funds, Direct Property, plus various alternative assets such as Artworks.

Pension Choice

In pension phase, the fund can pay multiple styles of pension to members without requiring separate superannuation funds. With such flexibility, a retirement income strategy can be developed to maximise tax effectiveness in retirement.

Estate Planning

SMSFs provide flexibility in designing your estate planning requirements and can also minimise the tax consequences of transferring your superannuation assets.

Establishing a SMSF

What do you have to do

There are a number of activities required to establish your own fund. The most important is to purchase a trust deed that is flexible enough to deal with the majority of
future legislative changes.

Other activities include applying for a Tax File Number and ABN from the Australian Tax Office, documenting decisions to establish the fund and admit members, appointment of an auditor and administrator and the development of a written investment strategy.

SMSF criteria

A Self Managed Super Fund (SMSF) is a superannuation fund that as a rule meets the following conditions:

  • Has 4 or less members
  • Each member of the fund is a trustee
  • No member of the fund is an employee or another member of the fund, unless those members are related
  • No trustee of the fund receives remuneration for his or her services as a trustee
  • Is registered with and regulated by the Australian Taxation Office

The Sole Purpose Test

A SMSF must meet the sole purpose test at all times to be eligible for tax concessions available to superannuation funds. The sole purpose test requires that a SMSF be maintained for the purpose of providing benefits for members upon their retirement, or their dependants if a member dies before retirement.

Other areas to consider

Compliance

SMSFs are heavily regulated by the Australian Taxation Office (ATO) and trustees are legally responsible for ensuring the fund operates lawfully and meets its legal
obligations. Compliance breaches are treated very seriously by the ATO. Nouveau Wealth Management assists trustees to avoid compliance breaches.

Restrictions

The fund cannot lend money or provide financial assistance to a member or a members relative

SMSFs are restricted from investing more that 5% of the funds total assets in ‘in-house’ assets, an ‘in-house’ asset is where the asset has a connection to a related party of the fund.

Trustees cannot receive a personal benefit from fund asset, for example shareholder discount cards, hanging art in your house

Managing the paperwork for you

Paperwork such as accounting records, fund transactions, annual tax returns, member reports and minutes of trustee meetings must all be prepared and kept. Nouveau Wealth Management can assist in all of those areas through the network of professionals that they liase with.

Charter Financial Planning Limited is not responsible for any of the advice given by the above mentioned network of professionals.

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