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Self Managed Super Fund

Insolvency & Bankruptcy

Self Managed Superannuation Funds

What are Self Managed Superannuation Funds (SMSF)?

A Self Managed Super Fund (SMSF) is a small superannuation trust and its key purpose is to provide retirement benefits to its members. The members themselves act as trustees, so they actually control and run the super fund.

A SMSF works in the same way as other types of superannuation funds, as the trustees hold the assets of the fund for the benefit of the members. In a Self Managed Super Fund, the members are also the trustees so they hold the assets and have complete security, management and flexibility over their own superannuation.

As trustees, the members grow the investment strategy, make investment decisions and invest accordingly. A SMSF can invest in almost any investment products, subject only to specific restrictions, commercial and residential property directly and more foreign assets.

By definition, a SMSF is a superannuation fund where:

  • It has four (4) or fewer members
  • All members are trustees, and
  • No trustee receives any compensation for their trustee service

The only exception would be cases of a single Self Managed Super Fund or an SMSF with a corporate trustee.

The general arrangements for a single member SMSF are:

  • Two trustees: one is the member and the other a relative
  • The body corporate is the trustee: the member is the body corporate sole director; or
  • The member is one of only two (2) directors of the body corporate and the other director is related to the member.

A Self Managed Super Fund (SMSF) can also have a corporate trustee with more than one member. In this case, all members of the SMSF must be directors of the body corporate and all directors must also be members. In summary, almost anyone can set up a SMSF.