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SMSFs (Self-managed super funds)

Our SMSFs guide is for Australians running self-managed superannuation funds (SMSFs), and covers SMSF costs, investing, SMSF compliance and SMSF pensions.

A superannuation fund must meet basic conditions to be considered a self-managed super fund (SMSF). The basic requirements of a SMSF (also known as a DIY super fund) include the following:

  • Maximum number of members is 4
  • Each member of a SMSF must also be a trustee of the fund, and all trustees must be members (except when a non-member trustee for a single member fund)
  • A SMSF trustee cannot receive payment for performing the role of trustees
  • No member of a SMSF can be an employee of another member, unless they’re relatives (‘relative’ has a specific definition)

For most SMSF trustees, the desire for greater control over super savings is the main reason for starting a SMSF. Some typical reasons why individuals set up SMSFs are

  • Control over your fund’s investment strategy and a greater choice in what you can invest in, including direct property and collectibles such as works of art. See our special section, SMSF investment.
  • A belief you can do a better job investing your super money than your existing fund’s trustees, and at a lower cost. We explain how much a SMSF costs in the SuperGuide article SMSFs: How much does a DIY super fund cost?
  • The ability to take advantage of tax benefits linked with super (see SuperGuide article Four must-knows about super’s tax rules).
  • Flexibility in when and how you fund your retirement, including starting a superannuation pension (see SuperGuide article SMSF pension: How do I start one?).
  • Opportunities to purchase business property, such as an office, within the SMSF, and to use the property in your business (see our special sections Property and superannuation and SMSF borrowing (gearing)).
  • For the purposes of greater control over your estate planning. Any death benefits paid from your fund to your dependants (under the tax laws) are tax-free, and a benefit payments tax is payable on super benefits paid to your adult children (see our special section Superannuation death benefits).

You can click on the links below to learn more about the different aspects of a SMSF, and being a SMSF trustee:

Set out below are all SuperGuide articles referring to SMSFs (Self-managed super funds).

Comparing super funds: Who’s who in the super zoo?

Note: We regularly update this article with the latest data on superannuation funds issued by the Australian Prudential Regulation Authority. This article contains the latest data available, released on 22 August 2017 (for data as at 30 June 2017).Unless you work in the superannuation industry, how the world of ... Read more

by 6 Comments

SMSF investment: Can we sell fund assets to members?

Q: We understand that SMSFs cannot purchase property from members. What we want to know is whether members can purchase property owned by the SMSF, providing fair market valuation is paid for this? Does the valuation need to be established through a valuation, or is an appraisal sufficient? Our SMSF currently jointly ... Read more

by 4 Comments

SMSF basics: Can my DIY super fund borrow money?

The general rule is that your super fund can’t borrow money, although like all rules the ‘no borrowing’ rule has some exceptions. SMSF trustees need to understand the difference between direct borrowing and indirect borrowing and the special rules that apply to each exception.A relaxation of the super rules in 2007 ... Read more

by 3 Comments