All over the globe, every single person is in pursuit of improving and building their future. It’s either building trust funds for their child’s college fee or repayments of loans and mortgages or so. However, the majority of these people tend to ignore the need of saving some part of that struggle for themselves in the form of their retirement fund. If considered, technically, the first right over one’s earnings is their own. So, in order to secure one’s future they must invest now to live in harmony after retirement rather be dependent or work all their life and struggle.

There are many companies working globally to offer a retirement plan and funds for the hard working employees but there are always certain loops that do not give the person the liberty to handle their own fund. It would be rather a dream like concept for certain people.

However, recently, the most secure and popular of all the ways of building a retirement fund is investment in SMSF. Hearing that the very question that arises in a newbie’s mind is what exactly is SMSF? What are its benefits? How is it operated? All these simple questions shall be discussed in detail further in the article by Tax Accountants Melbourne.


SMSF stand for Self-Managed Super Fund and considered to be the most effective of all retirement fund currently available in the country. It is reported that currently. Almost 1 million of Australians have invested and operate their SMSF. Facts state that largest chunk of the superannuation of the country precisely 31.4% comprises of SMSF. This is basically due to the power and control that SMSF investment strategy tends to provide to its users.

SMSF doesn’t make its users the mainstream fund members but the trustee of the fund which in simpler words can be defined as the operator of the fund. This makes the SMSF investor the controller of the fund as he is responsible of all the decision making processes, all the financial and legal accountability falls in their lap. This responsibility enables them to fulfill all the legal requirements stated by Australian Tax Office (ATO) in the most appropriate manner as well as educate them of all the legal requirements involved in their fund.

Benefits of SMSF

Unlike all other funds, SMSFs propose several of benefits that makes a difference;

  • Control over investment- creates an investment strategy in-order to control where and how to invest the SMSF.
  • Extra choice for investment- select from a broader variety of investments including listed and unpublicized shares, housing and commercial property, and collectables.
  • Fund Consolidation- The option of consolidation of the fund with at most three people is allowed by the government. It facilitates the further investment in high value assets in order of consolidating fund with fewer members. It helps attain better estate planning flexibility hence causes reduction in fund expenses.
  • Loan to support bigger investments-The cash in the fund can be utilized to make a greater investment in assets (shares and property) and in case of more money support acquire a loan.
  • Tax funds- SMSF provides better control over the tax events timings for instance beginning an annuity without activating capital gains tax. As well as enables shifting owned assets to SMSF.
  • Better estate development and planning flexibility- You can nominate who you would like to receive your super when you pass away without having to meet some of the constraints that apply to other super arrangements.

Manage SMFS Successfully

The first step is to ensure that the required amount of money is available to start and run an SMSF. The Australian Tax Office suggests the figure to be at-least $200,000, as an official starting amount for SMSF. When the questions are raised upon such high investment figures, it is argued that amount less than $200,000 causes the real risk of SMSF as difficulties are experienced while earning enough money to make arrangement and running expenses worthy.

One must have the thorough knowledge about the expenditures involved. SMSF operators tend to pay their own charges which include all bookkeeping, legal, Tax Return Melbourne and auditing charges. Usual costs may be estimated to be nearly $5000 per year.

Get the clear picture on in-house assets investment. In-house assets are basically all assets property of the SMSF fund manager. According to latest ATO principles the SMSF fund is allowed to invest till 5% of its value on in-house asset. The Australian Tax Office states that in-house assets are said to be the cause of a noteworthy amount of breaches. If case of doubts in in-house investment value consult a specialist to acquire expert advice.

Never use money in SMSF. It is rather unadvisable to extract and utilize from an investment and SMSF falls in the very category. In case one borrows from their SMSF According to the ATO rules a SMSF manager can be liable to tax charged by 45 cents per dollar along with declaration of fund as incompetent.

It is highly recommended to acquire expert advice form Tax Agent Melbourne in order to ensure smooth running and management of SMSF. The authorized ASIC which tend to regulate the certified and registered SMSF professionals defines expert advice with proper consideration of all the investor’s important information, specific attention must be given to the investor’s financial requirements and goals, Inclusion of well revised suggestion regarding personal insurance, Clear explanation regarding the range of the advice must be provided, and it must be supported by a rational and perfect Statement of Advice.

Hence an SMSF financial adviser or expert contributes as a vital part of SMSF processes. They participate by employing their expertise to help the trustee to make proper and right decisions.