All trustees/directors of SMSFs are equally responsible for the running of the fund for the benefit of its members. You should understand your responsibilities before setting up your fund. You can learn more about SMSFs from the ATO website here. Also, please ensure that all members/directors can access their super, are eligible to run an SMSF and satisfy the residency rules.
You can not access your superannuation until you reach retirement age. Make sure you do not use use the funds for personal use. Not even for 1 day. Using your SMSF funds for personal use can get you a jail sentence, a fine and your assets frozen. Check out the ATO website to see when you can access your super.
All SMSF accounts and transactions must be kept totally separate from your personal accounts. So you need to set up dedicated SMSF accounts for banking, crypto, share trading accounts etc. Mixing funds with personal accounts could end you up with a hefty fine from the government. So make sure you check with us if you are unsure.
SMSFs can often get better insurance deals than retail funds because SMSF insurance can be tailored to you as opposed to getting handed a product off the shelf from a retail fund. If you are on a good deal and want to keep it, you can keep a few thousand in your old fund to keep the policies active and rollover the rest. The rules are different with different funds, so call your provider to find out what is the minimum required balance to keep insurance policies active.
You cannot borrow, leverage or short any assets within the SMSF. You are not allowed to use the collateral in the SMSF to secure other loans either. No exceptions. Doing so could leave you with a government fine. You can borrow to purchase property in an SMSF if you set up a bare trust which we can offer for additional costs.
You may only bank and trade with our approved providers.
Banks: ANZ, NAB and CBA.
Crypto: CoinSpot, Independent Reserve and BlockFi.
Shares: ANZ Share Investing, NabTrade, Commsec, SAXO and Interactive Brokers
You are also required to provide "read only" access to SMSF accounts via API or data feed where available. This means less work for you at tax time.
Our $150 per month accounting fees cover the tax returns, audits and compliance on up to 100 transactions within the fund per financial year. This is more than enough for the vast majority of clients. Additional transactions will be charged at $4.40 per transaction.
You are permitted to purchase privacy coins on approved exchanges but they must be 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 location of the coins once off the exchange. Moving privacy coins off the exchange will attract a fine.
You can buy gold and other precious metals in your SMSF but you cannot keep them at home and it must be kept with a qualified and insured custodian. See our blog post about holding gold in your SMSF here.
You can have up to 4 immediate family members in your SMSF. While the setup costs are the same regardless of how many people are in the fund, funds with additional members are charged an extra $20 per month per additional member . Each member is equally responsible for the running of the fund. The SMSF runs as one entity so you cannot for example say "this is my gold and this is your bitcoin." Each member owns a proportion of the fund.
It is important to understand that the contributions you and your employer make to your super are taxed. This is exactly the same as your normal retail superannuation fund but you do not notice this with a retail super fund because it gets taken out automatically. However for SMSF's, you get to control all the money throughout the year and the contributions tax (15%) is added to your tax bill at tax time.
You are permitted to stake coins which satisfy 2 conditions. 1) the coin is available on either CoinSpot or Independent Reserve; and 2) the staking rewards need to be sent to an address available on your SMSF hardware wallet. Please be aware that all staking transactions count toward your transaction limit for the financial year.
It is important to understand that each person in the fund is acting as a member and a fund manager. You as the fund manager are responsible for investing the member's money for their retirement. It is against the law to borrow from the fund for personal use.
The standard time it takes from completing the application until you own assets in your new SMSF is 2-3 weeks. This is true for most applications. However, hold ups can occur.
The most common hold up is waiting for the ATO to approve the fund. The ATO approval is needed before you can open the bank account or apply for your rollover. If it takes longer than a week for the ATO to approve the fund you are likely getting an initial audit. This is where an ATO representative will double check the paperwork and want to ask you questions to make sure you understand your responsibilities in running an SMSF. This will add a few weeks to your set up process as the members will need to book in a time to speak with the ATO rep.
If your application for an SMSF is denied by the ATO we do not offer refunds as most costs go to ASIC, legal and administrative costs before ATO approval comes in. Because of this, if you fall into any of the categories below, you should seriously consider waiting to set up an SMSF until your circumstances change.
While New Brighton Capital does not offer financial advise, we are here to help. If you are unsure on some of the ins and outs regarding an SMSF, why not book free consultation with one of our specialists who can answer your questions in plain english?
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, except for 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.
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