Frequently asked questions

A self managed super fund (SMSF) is an entity that allows you to become the fund manager for your superannuation. So you become responsible for investing your super and are also responsible for complying with the super and tax laws. New Brighton Capital looks after the tax reporting and compliance side of things and you are free to focus on building your portfolio. New Brighton Capital does not provide financial advice or provide any recommendations in regard to SMSF assets. You can read more about SMSFs on the ATO website here.

All trustees/directors of SMSFs are equally responsible for the running of the fund.  You should understand the following:

  1. Are you eligible to run an SMSF?
  2. What are your responsibilities?
  3. Do you satisfy the residency rules
  4. What are the penalties for non-complianceYou can learn more about SMSFs from the ATO website here.

New Brighton Capital Cost To Establish An SMSF: 

  • $1600 (inc GST).   

New Brighton Capital Ongoing Accounting fees:

  • $1800 financial per year, paid monthly ($150 per month)
  • additional members $20 extra per month

Other Annual Costs

  • ASIC registration: $54 per year
  • ESA registration: $56 per year

See Pricing Page for more info

While we can establish your SMSF within 3 days, it can take some time to get ATO approval, open accounts etc. It is common for new funds to be up, running and in a position to acquire assets (should you wish to do so) within 3 weeks. However, hold ups can occur. See Set Up Time Frames on the NEED TO KNOW page for more information on possible delays.

Nobody has control over the accounts or investment decisions on an SMSF but the trustee(s) who control the SMSF (that is generally you). For corporate trustee SMSFs all members are directors of the corporate trustee. For individual trustee SMSFs all members are trustees of the SMSF except for single member individual trustee SMSFs, where you need a second person to come in as a second trustee. In this case you have two people who are trustees and one member. For more information on corporate vs individual trustee SMSF see the ATO website here: https://www.ato.gov.au/super/self-managed-super-funds/setting-up/choose-individual-trustees-or-a-corporate-trustee/

The sole purpose test sets the primary and ancillary purposes for which a superannuation fund must be operated, namely to provide benefits to, or in relation to, members after their retirement, on reaching retirement age, or on their death. The test is in section 62 of the Superannuation Industry (Supervision) Act 1993 (SISA).

Your SMSF needs to meet the sole purpose test to be eligible for the tax concessions normally available to super funds. This means your fund needs to be maintained for the sole purpose of providing retirement benefits to your members, or to their dependants if a member dies before retirement.

Contravening the sole purpose test is very serious. In addition to the fund losing its concessional tax treatment, trustees could face civil and criminal penalties.

It’s likely your fund will not meet the sole purpose test if you or anyone else, directly or indirectly, obtains a financial benefit when making investment decisions and arrangements (other than increasing the return to your fund).

When investing in collectables such as art or wine, you need to make sure that SMSF members don’t have use of, or access to, the assets of the SMSF.

Your fund fails the sole purpose test if it provides a pre-retirement benefit to someone – for example, personal use of a fund asset.

Reference form the ATO Website here

An in-house asset is any of the following:

  • a loan to, or an investment in, a related party of your fund
  • an investment in a related trust of your fund
  • an asset of your fund that is leased to a related party.

There are some exceptions, including:

In-house assets can't be more than 5% of your fund’s total assets.

If, at the end of a financial year, the level of in-house assets of a self-managed super fund (SMSF) exceeds 5% of a fund’s total assets, the trustees must prepare a written plan to reduce the market ratio of in-house assets to 5% or below. This plan must be prepared before the end of the next following year of income. For example, if an SMSF exceeds the 5% in-house asset threshold as at 30 June 2018, a plan must be prepared and implemented on or before 30 June 2019.

Reference from the ATO Website here

An arm's length transaction is when the purchase and sale price of fund assets reflects the true market value of the asset, and the income from assets held by your fund reflects the true market rate of return.

Basically this means the SMSF cannot give or be given any behind the scenes deals when the price is different from what could be expected in the open market.

See the ATO's webpage on arm's length transactions here: https://www.ato.gov.au/super/self-managed-super-funds/investing/tax-on-income/non-arm-s-length-income/

You can be as active or as inactive as you deem appropriate in managing the assets of the SMSF.

In terms of providing documentation at the end of the financial year for us to complete your tax return, as long as you keep activity to approved providers, it should take no longer than 1-2 hours per year.

No. You can just withdraw a portion of your retail super to allocate to an SMSF if you wish. You can do multiple partial transfers into an SMSF. However, you cannot withdraw funds out of the SMSF and back to a retail fund without additional work and fees because we will need to complete an interim report on your SMSF to record the state of your SMSF when the transfer out occurs.

There is no legal minimum requirement to have an SMSF. The ATO will approve or reject your application based on a few criteria. These include your current employment situation, your earnings, are your returns up to date and is there any money owing, plus whether it is financially viable for you to run a SMSF.

New Brighton Capital cannot provide advice as to whether you should or should not have an SMSF. There are really only three things we can tell you here...

  1.  Those thinking about starting an SMSF should come to their own decision in deciding if the costs to set up run an SMSF make sense for their situation and objectives.
  2. You should consider taking advice from the holder of an Australian Financial Services Licence before making a decision on a financial product.
  3. Please be aware that if you apply and your application gets rejected, you forfeit the $1600 application fee.

No. New Brighton Capital has no control over your funds or assets and there are no lock-in contracts. If you wish to move to another provider, just provide us their details and we will forward any relevant records to them so they can take over.

Tax payable in your annual SMSF tax return is made out of 3 components…
1. ATO Supervisory Levy
2. Income, Dividends & Contributions / Expenses & Fees
3. Capital Gains / Capital Losses

Check out the blog here or see below for more detail:

1. ATO Supervisory Levy

Each year when your tax return is lodged your fund is required to pay a supervisory levy to the ATO (currently $259).  Note that new funds in their first year need to pay this amount twice when lodging their first tax return, then once a year from then on.

2. Income, Dividends & Contributions / Expenses & Fees

All the income into your fund from employer, personal contributions (up to $27,500) and dividends is taxed at 15%.  The taxable amount is offset by any expenses and fees your fund paid throughout the year. (eg accounting fees, hardware wallet etc). Contribution taxes are covered in this blog post: http://newbrightoncapital.com/blog/f/how-are-super-contributions-taxed

3. Capital Gains / Capital Losses

Any time a single asset is sold for a profit. For example, if you buy a coin for $100 and then you sell the coin for $200, you are taxed 15% on the $100 profit you made ($15 tax).

If you make a loss on the sale of an asset, your loss will be offset against your gains for the financial year and if you make a loss overall, your capital loss is carried forward into the next financial year.

Please note: It is possible for the “on paper” value of your fund to have gone down in value and the fund may still have to pay tax. This is because it is not the value of the assets that determines the tax payable but whether or not any of the assets sold during the year were sold at a profit.

Profits in super is taxed at 15%. If an asset is classified as property like realestate or crypto currency, then capital gains tax exemptions apply. This means that if you buy and sell the property within one year and make a profit you’ll be taxed the normal 15%, however, if you sell an asset after owning it for 1 year or more, the profit will be taxed at only 10%.

Watch this video on How to Find Your Lost Super.

Learn how to find your lost superannuation in 3 steps.

  1. Create a myGov account
  2. Link myGov account to the ATO
  3. Look up all super accounts attached to your TFN

Before setting up your SMSF check out the NEED TO KNOW and Pricing page. If that all makes sense, then you can set up your SMSF by filling in the form HERE. If you would like more information, read through this FAQs page or book in a time that suits you for a free no obligation chat.

New Brighton Capital's approved providers are not a legal requirement but they are a requirement if you wish to be client of ours. Keeping trading activity to approved providers ensures that our team can complete your tax returns efficiently and that the reports provided by exchanges meet the auditor's requirements.

Currently the approved exchanges/providers are:

  • NABTrade
  • Commsec,
  • ANZ Trade
  • Saxo Markets
  • Interactive Brokers
  • Coinspot
  • Independent Reserve
  • Binance
  • BTC Markets
  • Swyftx
  • Celsius
  • BlockFi.

Trading on unapproved exchanges / providers will incur a fee of up to $550 per activity and we may not be able to complete your tax return. This is not designed to make money but to ensure we can complete the work efficiently and also so that the reporting meets the auditors requirements. You can see an approved auditor checklist here.

Please contact us if you are unsure about approved providers.

An SMSF is permitted to own real estate, however there are rules that are needed to abided by that you need to consider before purchasing.

  1. You cannot acquire the property from a related party.
  2. You cannot live in the property, neither can family or friends at a rate lower than market rate.
  3. You cannot do any capital improvements. This means for example that you cannot develop property or turn a 2 bedroom house into 3 bedroom house etc.
  4. If you have a mortgage for the property, it must be positively geared. This means that the rent income must be enough to more than cover all the costs related to the property like mortgage payments, insurance, management costs, maintenance costs etc.

Please check out this blog for more information:

http://newbrightoncapital.com/blog/owning-real-estate-in-your-smsf

See ATO webpage on Arm's Length transactions here.: https://www.ato.gov.au/super/self-managed-super-funds/investing/tax-on-income/non-arm-s-length-income/

SMSFs in general cannot have any debt, so if you require a mortgage to purchase the property, you need to set up a bare trust which will hold the property and the mortgage. A bare trust is an entity that sits next to your SMSF. The bare trust acts as a firewall between the mortgage and everything else. So if the property ends up losing value, or going to zero, the banks cannot try to chase the outstanding debt from the SMSF or you personally. For this reason, banks might require at least 40-50% as a deposit and interest rates can be higher than normal home loans.

See info on Setting up a Bare Trust here

An SMSF is permitted to invest in International Shares, provided it is permitted in the SMSF trust deed and acquisitions are made in line with the SMSF’s investment strategy

An SMSF is permitted to own gold and other precious provided it is stored with a qualified and insured custodian or securely stored at home with adequate insurance in the name of the SMSF. If storing precious metals at home additional costs may apply relating to proving the existence and value of the holdings each year.
See more info on owning precious metals in this blog here.

The information provided in the FAQs is in no way a recommendation, or endorsement or intended to provide an opinion on any asset asset class referred to therein.  The information provided is for the sole purpose, and only to the extent reasonably necessary for the purpose, of ensuring compliance by the person advised with the SIS Act (other than paragraph 52(2)(f)), the SIS Regulations (other than regulation 4.09) or the Superannuation Guarantee (Administration) Act 1992 . New Brighton Capital Pty Ltd is not licensed to provide financial product advice under the Act and the client should consider taking advice from the holder of an Australian Financial Services Licence before making a decision on a financial product.

An SMSF is permitted to own cryptocurrencies. If you are thinking of owning cryptocurrency in your SMSF you need to be aware of several things:

  • All cryptocurrency exchange accounts need to be in the name of the SMSF
  • The account can be used only for the SMSF (eg no personal holdings or transactions),
  • Coins may be kept off the exchange, i.e. in a hardware wallet. The hardware wallet must be used solely for the SMSF and can never have been used for personal holdings.
  • Privacy coins can be held within your SMSF but must be kept on a exchange, ie. they cannot be kept on a hardware wallet. This is because the auditor needs to be able to verify the coins existence and cannot do this for privacy coins without the private keys.
  • All purchases and sales of cryptocurrency need to take place on approved exchanges. This is not a legal requirement but a requirement if you wish be a client of New Brighton Capital. For more information here, search "Approved providers" in the search bar above.
  • Staking is allowed as long as you provide us with an excel/CSV file showing the details of all rewards received (including date, coin, amount received). New Brighton Capital charges $55 per receiving address and per coin staked.
  • No investing in NFTs or yield farming

New Brighton Capital Pty Ltd is not licensed to provide financial product advice under the Act and the client should consider taking advice from the holder of an Australian Financial Services Licence before making a decision on a financial product.

Yes, an SMSF can transfer non-privacy coins from the exchange to store on a hardware wallet that only the SMSF trustees control. You just have to make sure that the device has not been used before and is only ever used for the SMSF funds. The hardware wallet can also be paid for by the SMSF. At tax time simply share the public address with us so we can confirm the holdings by looking it up on the blockchain.

An SMSF is permitted to own collectibles.

Collectables and personal use assets include:

  • artworks
  • jewellery
  • vehicles
  • boats
  • wine.

Investments in such items must be made for genuine retirement purposes, not to provide any present-day benefit.

Collectables and personal use assets can't be:

  • leased to, or part of a lease arrangement with, a related party
  • used by members or a related parties
  • stored or displayed in a member's private residence or that of a related party.

In addition:

  • your investment must comply with all other relevant investment restrictions, including the sole purpose test
  • the decision on where the item is stored must be documented (for example, in the minutes of a meeting of trustees) and the written record kept
  • the item must be insured in the fund's name within seven days of the fund acquiring it
  • if the item is transferred to a related party, this must be at market price as determined by a qualified, independent valuer
  • as with all fund assets, check prior to purchase that they are not encumbered in any way (you can use the Australian Financial Security Authority's Personal Properties Security Register to ensure that collectables and personal use assets have no security interests over them prior to your purchase).

You can read more about collectibles and personal use assets on this ATO webpage here.

New Brighton Capital Pty Ltd is not licensed to provide financial product advice under the Act and the client should consider taking advice from the holder of an Australian Financial Services Licence before making a decision on a financial product.

You do not have to transfer all your super into an SMSF, you are permitted complete a partial transfer, or even multiple partial transfers.
Since all providers have different forms for partial transfers, you will need to contact your provider to request their specific "partial rollover form".

Completing partial transfers into the SMSF does not attract addition fees from New Brighton Capital. However, additional fees apply when withdrawing funds out of the SMSF and back to a retail fund, because we will need to complete an interim report on your SMSF to record the state of your SMSF when the transfer out occurs. The cost of an interim report is $550.

New Brighton Capital Pty Ltd is not licensed to provide financial product advice under the Act and the client should consider taking advice from the holder of an Australian Financial Services Licence before making a decision on a financial product.

Your SMSF can pay for 3 types of insurance for the members.

  1. Life insurance
  2. TPD (Total and permanent disability insurance)
  3. Income protection insurance

Insurances paid for by the SMSF are a tax deduction for the SMSF.

When having your SMSF pay for insurance please make sure that the account and invoices are in the name of the SMSF and not your personal name.

You can choose one of the following structures for an SMSF:

  • Individual Trustee SMSF: this is when individuals (minimum two people) are responsible for the running of the SMSF.
  • Corporate Trustee SMSF: this is when a company is responsible for the running of the SMSF and all members of the fund are also directors of the company.

You should discuss this decision with an SMSF professional. The two structures differ in terms of:

Find out more information on this ATO Webpage 

An SMSF trust deed is a legal document that outlines the rules of the SMSF, how it will be set up and how it will operate. An Australian SMSF must be established with a trust deed that complies with Australian superannuation legislation

Good record keeping is essential in running an SMSF.

Meeting minutes are the written records of everything that's discussed and agreed upon during a meeting. For example, you might have a meeting to decide where to open account, what investments were agreed upon, who to appoint as accountant for the fund. The minutes would include recording all these discussions and what was agreed upon. It could also include who agreed or disagreed with each decision.

The ATO has a section on record keeping requirements for SMSFs here: https://www.ato.gov.au/super/self-managed-super-funds/administering-and-reporting/record-keeping-requirements/

New Brighton Capital can provide clients with minutes templates on request. Trustees then fill in the blanks regarding the specifics of the meeting.

Self-managed super funds (SMSFs) are required to prepare and implement an investment strategy. The investment strategy is document which is updated regularly by the trustees which highlights the fact that then trustees are investing for the benefit of the members for their retirement and acting in their best interests.  It also highlights the asset allocation and the reasons why you have decided on that asset allocation.

It is designed to be reviewed and amended regularly. You might review your investment strategy when...

  • your or other members views about the markets change
  • the life situation of the members changes
  • a member is added, removed or going on pension
  • your live asset allocation ranges fall outside the asset allocation set within the investment strategy

If you wish to or need to alter your investment strategy you can message us via the portal and we will forward you the template.

We will also provide you with a template annually at tax time to review. If you need assistance with your investment strategy, you should consider taking advice from the holder of an Australian Financial Services Licence.

Please be sure to read and understand the following information on the ATO website regarding investment strategies and asset restrictions.

An initial SMSF audit is a process where the ATO conducts an investigation prior to an SMSF being approved to make sure that:

  1. the members understand their obligations in running an SMSF
  2. all the documentation is in order
  3. the members have sufficient funds to support the running of the SMSF
  4. the trustees have enough financial knowledge

The ATO may chose to conduct an initial SMSF audit for a variety of reasons. For more information on initial SMSF audits, including a list of questions that may be asked during an initial SMSF audit, please click here 

Every year your SMSF tax return needs to be audited by an independent SMSF auditor. An SMSF auditor examines the validity and accuracy of an SMSF's financial records and makes sure that the fund is compliant with superannuation rules.

The annual audit needs to be completed by an independent third party. New Brighton Capital facilitates the completion of your annual SMSF audit with an independent third party provider on your behalf and the cost is included in your annual fees.

ESA stands for Electronic Service Address – it is a service that automatically notifies you and the ATO whenever you receive a rollover or a super payment.
Your employer will use your ESA code together with your fund’s ABN to set up this messaging service.

For New Brighton Capital clients, your ESA is: BGLSF360

The members of an SMSF are the people whose money is being managed and invested for the sole purpose of providing for their retirement.

SMSFs, you can have up to 4 members in an SMSF. (Tasmania, Northern Territory and South Australia can have 6 members)

You cannot separate assets, so you can’t for example say these are my assets and these are your assets.

  • There is only 1 smsf (assets are pooled together)
  • There is only 1 bank account
  • There is only 1 trading account

At the end of each financial year, each member will receive their own separate statement of what they own, but the fund is run as one entity and you cannot separate assets within the fund.

So for example, you cannot say, “these are my assets and these are your assets”. Each member owns a part of every asset held by the SMSF. The proportion is determined by how much each member has contributed to the fund over time. This proportion is dynamic, meaning that it can change over time. For example, while you might start off with 60% of the fund’s assets if you stop contributing to the fund and your partner keeps contributing, your partner’s proportion will increase and yours will decrease. The actual proportion allocated to each member is calculated by the accountants.

You can include all members when establishing the fund but you can also add or remove members after establishment. The cost is $440 per member added and $550 to remove a member. If when removing a member and an interim statement needs to be prepared an additional $550 applies. An interim statement is required when a member leaves any time other than the very end of the financial year.

New Brighton Capital also charges an extra $20 per month per additional member.

You can have up to 4 members in your fund. It costs $440 to set up the new member and an additional $20 per month for accounting fees.
http://newbrightoncapital.com/blog/multiple-members-in-an-smsf

If you wish to remove a member from your SMSF please complete the Remove Member form and we will facilitate the process for you.

To remove a member the following steps need to take place:

Steps for removing a SMSF member:

  1. update the trust deed;
  2. prepare all the minutes for the trustees;
  3. update ASIC or ATO record;
  4. lodge change of superannuation entities details form with ATO and ABR;
  5. calculate exit member’s balance to the current date;
  6. prepare rollover statement for the exiting member;
  7. notify SMSF trustee of the payout figure for the exiting member.

It is not a requirement to use the services of a financial advisor when establishing or maintaining an SMSF. You can engage an independent financial advisor if you wish. Properly managing your investments and making the right financial decisions takes time, skill, and effort. Not everyone has the time to understand the markets or tax implications of their possible investment decisions. Financial advisers can help you understand issues like this and you should consider taking advice from the holder of an Australian Financial Services Licence before making a decision on a financial product. New Brighton Capital does not offer financial advice as is not licensed to provide financial product advice under the Act.

API is the acronym for Application Programming Interface, which is software that allows two applications to talk to each other.

In our case, we use the APIs from certain trading accounts to extract "read only' data relating to your trades and transactions which allows us to perform the accounting accurately and efficiently.

Once you sign up to New Brighton Capital and have had your SMSF approved by the ATO you will be given access to your own NBC portal. This is a platform for communication between you and the NBC team. The first thing you will receive is a Welcome Pack which includes step-by-step, written and video instructions on what you need to do to complete the set up of your SMSF, receive rollovers/contributions (if you decide to),  and set up accounts etc. After initial set up the portal turns into your online filing cabinet and communication platform with us where we can both ask questions, make requests and upload documents etc.

If moving overseas you need to be careful that you do not breach the Fund Residency Conditions.

There are 3 conditions that need to be met.

Fund residency conditions

An SMSF is an Australian super fund if it meets all three of these residency conditions:

  1. The fund was established in Australia, or at least one of its assets is located in Australia.
    • The fund was 'established in Australia' if the initial contribution to establish the fund was paid and accepted in Australia.
  2. The central management and control of the fund is ordinarily in Australia.
    • This means the SMSF's strategic decisions are regularly made, and high-level duties and activities are performed, in Australia. It includes
      • formulating the investment strategy of the fund
      • reviewing the performance of the fund's investments
      • formulating a strategy for the prudential management of any reserves, and
      • determining how assets are to be used for member benefits.
    • In general, your fund will still meet this requirement even if its central management and control is temporarily outside Australia for up to two years. If central management and control of the fund is permanently outside Australia for any period, it will not meet this requirement.
  3. The fund either has no active members or it has active members who are Australian residents and who hold at least 50% of either
    • the total market value of the fund's assets attributable to super interests, or
    • the sum of the amounts that would be payable to active members if they decided to leave the fund.

Please see: Fund Residency Conditions - ATO Webpage

We are unable to give you any advice and would strongly recommend confirming with the ATO and/or an SMSF lawyer to be sure.

Penalties can be severe if these conditions are breach.  eg frozen funds, 45% tax and wind up of your SMSF.

So please ensure you do your due diligence and get the right advice.

Yes you can.

If you have had any activity in your SMSF account, then you must do a final tax return to wind up the fund.

  1. You need to sell all assets and move all funds to your SMSF bank account
  2. If you do not have a retail super fund account still open you need to open another super fund account
  3. If working you need to redirect your employer contributions to the new fund
  4. Pay the final balance of your tax return
  5. The cost to wind up the fund, cancel the ABN and deregister the company is $440.
  6. Once final payment is received and there will be no more activity in your account, we will complete the tax return, wind up the fund and prepare a rollover benefits statement for you.
  7. We will need the following information from your new super fund for the rollover:
    Fund Name:
    ABN:
    USI:
    Member Number:

You must not use your SMSF funds for personal use. To withdraw funds from your superannuation (retail or SMSF), you must satisfy one of the conditions of release and check that the governing rules of your fund allow it.

You can access your super if you:

In special circumstances, at least part of a member’s super benefits can be released before the member has reached preservation age. These are:

See the ATO webpage for more details on conditions of release here: https://www.ato.gov.au/Super/Self-managed-super-funds/Paying-benefits/Conditions-of-release/

Also see our retirement / pension blog here: https://newbrightoncapital.com/pension-information/

If you are over 60 and you retire, you can access your super. If you access your superannuation before turning 60, even if you have retired, you may have to pay tax on payments you receive.

If you are over 60 years old, “retired” means that you are not working. For the purposes of accessing your super, you also qualify as “retired” if you change jobs after 60.

Our client services team can assist you with these transitions when the time comes.

See Pension Blog for more information or contact us if you need to set up a pension with your SMSF.

Your preservation age is the earliest age at which you can access your super without meeting an early eligibility requirement.

Your preservation age depends on when you were born. Refer to the figures below to determine your preservation age.

Preservation Age Based on DOB

Before 1 July 1960 - 55 years old

1 July 1960 - 30 June 1961 - 56 years old

1 July 1961 - 30 June 1962 - 57 years old

1 July 1962 - 30 June 1963 - 58 years old

1 July 1963 - 30 June 1964 - 59 years old

From 1 July 1964 - 60 years old

More info on this Pension Blog

APIs (or Active Programming Interfaces) as they relate to your exchanges, are a way for you to give access to your trading information to your accountant without the need for you to download it and send it yourself. Note, you should only ever provide someone else with read-only API keys. This ensures they have no access to your funds, only the transaction data.

Instructions on generating API keys for our approved cryptocurrency exchanges can be found here.

When a self-managed super fund (SMSF) member dies, the SMSF generally pays a death benefit to a dependant or other beneficiary of the deceased. This should be done as soon as possible after the member's death.

If the recipient is a dependant of the deceased, the death benefit can be paid as a lump sum or income stream. The income stream can be new or a continuation of an existing income stream.

If the recipient is not a dependant of the deceased, the death benefit must be paid as a lump sum.

See more info on the ATO Website here

An SMSF beneficiary is a person nominated by a member of an SMSF. In the event that the member dies, ownership of the SMSF assets belonging to the member are transferred to the beneficiary. A member can nominate zero, one or more than one beneficiary. In the even that more than one beneficiary in nominated, the member can specify the proportions that the want their assets distributed among the beneficiaries.

Beneficiaries can be anyone with the following exceptions. You cannot nominate yourself, or a witness to the establishment of the SMSF.

Yes, you can add your kids to your SMSF. However, trustees or directors of the corporate trustee company of the SMSF must be over 18 years of age. SMSFs set up as corporate trusts can have a maximum of 4 people (6 people in Tasmania, Northern Territory and South Australia).

No. Your SMSF cannot lend you or any of your relatives money. Making this type of loan must be avoided: it’s not a way of legally accessing super early via an SMSF.

Section 65 of the SIS Act prohibits superannuation funds, including SMSFs, from providing financial assistance to members or their relatives.

The trustee or an investment manager of a regulated superannuation fund (SMSF) must not:

  • lend money of the fund to:
    • a member of the fund; or
    • a relative of a member of the fund; or
  • give any other financial assistance using the resources of the fund to:
    • a member of the fund; or
    • a relative of a member of the fund.

Breaching this provision could lead to an administrative penalty of 60 units ($12,600 per trustee) as well as disqualification from being a trustee of an SMSF and/or civil and criminal penalties.

SMSF’s just like retail super funds or any other investment can lose money. As long as the trustees of the SMSF have conducted themselves and made investments for the benefit of the members in retirement, in line with the superannuation laws and rules of the trust deed then if the SMSF loses money them there are no repercussions other than the loss of value to the members.

Any capital losses the SMSF makes are carried forward into future years which can offset any future capital gains.

There is a broad range of assets that you can invest in with an SMSF, but it is up to you to ensure ...

  1. the asset is allowed under Australian Superannuation Laws
  2. the asset is allowed under the SMSF Trust Deed
  3. you know the rules around holding the asset

Refer to the ATO links below for more information on restrictions on investments.

https://www.ato.gov.au/Super/Self-managed-super-funds/Investing/Restrictions-on-investments/

https://www.ato.gov.au/super/self-managed-super-funds/investing/restrictions-on-investments/collectables-and-personal-use-assets/

If you have questions about specific assets please contact us and we will be happy to assist where we can.

Anything that is solely related to and 100% used for the SMSF can be paid for by the super fund. Examples of expenses that can be paid for by the SMSF and become a tax deduction for the fund include...

  • accounting fees
  • Life insurance, TPD and Income Protection for members
  • Courses and materials used solely for SMSF use

See the ATO webpage in SMSF expenses here: https://www.ato.gov.au/super/self-managed-super-funds/in-detail/smsf-resources/smsf-technical/smsf-deductibility-of-expenses/

See also our blog post about expenses here: http://newbrightoncapital.com/blog/can-your-smsf-pay-for-insurance

If you are unsure if an expense can be paid for and/or become a tax deduction for the fund please contact us via the portal and we will be happy to let to you know.

Concessional contributions are treated and taxed as income for the SMSF.

Non-concessional contributions are generally contributions made into your SMSF that are not included in the SMSF's assessable income.

Read this blog about super contributions. At tax time we will ask you if there were any personal contributions and if they were concessional or non-concessional. http://newbrightoncapital.com/blog/types-of-super-contributions

You can also see the ATO webpage on contributions here: https://www.ato.gov.au/super/self-managed-super-funds/contributions-and-rollovers/contribution-caps/

Salary sacrifice for an SMSF works the same as salary sacrifice in a retail superannuation fund.

A superannuation salary sacrifice agreement is an agreement between you and your employer whereby, a portion of your pre-tax salary is paid into your SMSF. Depending on your personal income tax rate this can reduce the tax payable on your personal income and the amount paid into your SMSF is treated as employer contributions (concessional contributions).

You can read about salary sacrifice on the ATO website here: https://www.ato.gov.au/general/fringe-benefits-tax-(fbt)/salary-sacrifice-arrangements/

Self-managed super funds (SMSFs) are not prohibited from carrying on a business, but the business must be:

  • allowed under the trust deed
  • operated for the sole purpose of providing retirement benefits for fund members.

The rules governing SMSFs prohibit or limit some activities available to other businesses, such as entering into credit arrangements or having overdrafts. You should get professional advice before carrying on a business through your SMSF.

See more info on the ATO Website here

Yes, you can invest in an IPOs (initial public offerings) or private companies, we would simply need the applicable info at tax time.

  • Company details
  • Number of shares allocated
  • Annual financials, valuations
  • Other information as may be required by the accountant and auditor.

You can only purchase coins already listed on approved providers, so unless the ICO is listed on an approved exchange, unfortunately you cannot purchase it until it listed on an approved exchange. Note: this is not a legal requirement but a requirement for the time being if you wish be a client of New Brighton Capital.

At this time our auditors have instructed us that clients are not permitted to buy NFTs with SMSF funds.

Below are instructions from the auditors.

Market Value

A requirement under r8.02B SISR is to value all fund assets at market value.   (http://classic.austlii.edu.au/au/legis/cth/consol_reg/sir1994582/s8.02b.html)
While the value of an NFT at acquisition is the cost, the value afterwards is unclear. Unlike cryptocurrency, there are no NFT price checkers available online to confirm their value.
Determining the market value at June 30 will be next to impossible, especially given the high-risk nature of NFTs due to their price volatility, liquidity issues, lack of authentication, being traded in an unregulated market and multiple scams.
SMSF auditors cannot meet their professional obligations under r8.02B where acceptable, appropriate audit evidence is lacking. It will result in a Part A qualification of the audit report where the value is material and may also be a breach of R8.02B SISR.

An SMSF is permitted to stake cryptocurrency.

Clients of New Brighton Capital are allowed to stake any coin as long as it is purchased through an approved exchange. The transactions will not count towards your annual transaction limit.

Staking on approved exchanges is free.

However, if staked off-exchange (in a wallet), there will be an additional fee of $55 per asset, per year per staking pool/destination. This is to cover the additional accounting required.

For off-exchange staking, we also require a downloadable report (excel or CSV format) of the staking rewards earned during the financial year.

An SMSF is not permitted to yield farm.

Yield farming involves borrowing which is not allowed within the SMSF

An SMSF is permitted to purchase options provided the position satisfies requirements under superannuation laws, trustees have a Derivatives Risk Statement in place and option trading is allowable in the Trust Deed and Investment Strategy.

An SMSF can buy calls and puts, but is not permitted to sell options naked. That is, the SMSF is not permitted to sell option contracts when it does not own at least the equivalent number of the underlying security as well.

Unless you meet a condition of release, you must not use SMSF funds for personal use.

You must keep personal and SMSF funds completely separate.

Your SMSF can only pay for expenses that are solely related to your SMSF.

Under special circumstances you can access super early. Those circumstances are referred to on the ATO website here: https://www.ato.gov.au/Super/Self-managed-super-funds/Paying-benefits/Conditions-of-release/

No, an SMSF is not permitted to leverage or margin trade.

Each members' share of the SMSF changes over time depending on each members' contributions into the fund. Our accountants calculate each member's balance each year and each member receives their own statement included in each year's tax return documents.

 

You are permitted to purchase privacy coins on approved exchanges but please ensure they are kept on the exchange at all times. You must not move privacy coins off the exchange at any time. This is because the auditors are unable to verify the existence and location of the coins once off the exchange. Moving privacy coins off the exchange will make your fund non-compliant and may attract a fine.

No, New Brighton does not offer financial advice.

New Brighton Capital does not hold an Australian Financial Services Licence and is not licensed to offer financial advice under the Act.

New Brighton Capital can only provide factual information about our services and SMSFs and that any information you receive from us is not intended to imply any recommendation or opinion about a financial product.

We can let you know the rules of SMSFs and how they work. We can also explain how we operate and how we can assist you, but we cannot give you any financial advice or recommendation or opinion about what you should do.

New Brighton Capital and our team are accountants and bookkeepers, not financial advisers. You should consider taking advice from the holder of an Australian Financial Services Licence before making a decision on a financial product.

No. As there is no central authority for De-Fi platforms, our auditors will not sign off on your fund being compliant as they require a report from the exchange and there is no way to show that the account is in the name of the SMSF. Currently you can only buy, sell and trade on the approved providers. Trading on unapproved platforms will incur a $550 fee and we may not be able to complete your tax return.

If you need to make a credit card purchase but do not have a card, you can make the purchase from your personal account and then reimburse yourself the exact amount from your SMSF with a transfer.

Please make sure you keep all tax invoices/receipts and have the invoice billed in the name of the SMSF and not your personal name. Some banks do offer a debit card for SMSF accounts so you can ask your bank if you plan on using a debit card regularly for SMSF activity.

PAYG (pay as you go) means you pay the tax for your SMSF at the end of each quarter instead of at the end of the financial year.  For SMSFs that have a tax bill, of $8000 or higher must pay PAYG quarterly and cannot pay annually.

For those under paying under $8000 in SMSF tax per year, if you do get put onto PAYG payments, we can request for your tax to be paid annually.

http://newbrightoncapital.com/blog/how-does-payg-work

As detailed on the pricing page, the application page and the engagement agreement, the accounting fees for a single member fund $1800 per financial year (paid monthly). The cost is $1800 per financial year regardless of when the fund is established. This is because the cost to complete the accounting, financial statements, audit and compliance costs the same whether your fund is open for 1 month or 12 months. Once you have the SMSF bank account set up we set up a direct debit. The first monthly debit brings the fund up to date for the financial year.

For example: if a single member fund is set up in December the first debit will be $150 x 6 = $900. From then on the monthly debit is $150. Accounting fees are a tax deduction for the fund.

While an SMSF is permitted to lend out and earn interest,  an SMSF is NOT permitted to borrow funds or use the equity in the SMSF to get a loan.

http://newbrightoncapital.com/blog/how-to-set-up-a-blockfi-account-for-your-smsf

The ATO decides what penalties they impose depending on the situation. Here is a link that explains this better:  How the ATO deals with non-compliance

Please understand that legally New Brighton Capital are not allowed to offer opinions, recommendations or anything that could be considered advice.

We can only provide factual information about what we do and what is required to establish, run and close an SMSF.

Our portal, videos, instructions and customer support really do nurse you through the whole process and if you are unsure on what you can or cannot do at any time, whether through the set up or down the track, we are here to help.

But at the end of the day, you need to decide what is right for you regarding any financial decision.

If you want advice on what to invest in, you should do your own research and should always consider taking advice from the holder of an Australian Financial Services Licence before making a decision on a financial product.

As the trustee of your SMSF you need to manage the cash flow of the accounts to ensure you have enough to pay the SMSFs bills when they become due. You need to make sure you have enough to cover accounting fees, any insurance premiums if applicable, taxes etc. It is worth noting that even though you might be paid weekly or fortnightly, many companies only pay the superannuation to their employees once a quarter. So keep this in mind when managing the cash flow of your SMSF.

The ATO has plenty of resources under the SMSF section here: https://www.ato.gov.au/Super/Self-managed-super-funds/

Between our 10 Step Guide, Need to Know page, the FAQs and the Blog, many questions are covered.

You are also welcome to book in a free consult if you wish to speak to one of our team.

New Brighton Capital offers guidance and assistance in the set up of Self Managed Super Funds (SMSF) & the ongoing accounting admin associated with SMSFs. New Brighton Capital does not offer financial advice as it is not licensed to provide financial product advice under the Act, except for the sole purpose of, and only to the extent reasonably necessary for, ensuring compliance with the superannuation legislation and advice on the process of creating ,winding up or exiting an SMSF as per regulation 7.1.29(5) of the Corporations Regulations 2001. You should consider taking advice from the holder of an Australian Financial Services Licence before making a decision on a financial product.

Keep in mind that you certainly don’t have to cease any relationship you currently have with your accountant.

We take care of the accounting work solely for the SMSF. However you currently do your personal or business tax returns remains unchanged. And there is usually no crossover between what we do for your SMSF, and what your current accountant may do.

A way to think about it is that your current retail superannuation fund is handling the taxation and financial reporting on your behalf already with no input from your personal accountant. If there is any cross over (like with personal contributions or salary sacrifice you are doing into your super) then we can communicate with your personal account around that.

SMSF Structure

Directors and members
Each SMSF has directors who control the company.
Each director is also a member of the fund.

 

Company
The company is entrusted to make the investment decisions for the benefit of the members of the SMSF.

 

SMSF
The SMSF is the entity that holds all the assets and the accounts relating to the members’ investments.

Structure of accounts example

Where to get more information?
For more information relating to SMSFs see our NEED TO KNOW page or BOOK IN YOUR FREE 20 MINUTE CONSULTATION to have your questions answered by one of our friendly team.

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