Our advice is practical and hands-on, based on our extensive experience in the accounting, audit, taxation and financial planning aspects of superannuation.
How can we help you?
There are a number of key areas of superannuation that need your attention to ensure that you have the best approach in place and that your super is working at full capacity.
Superannuation legislation is a complex area. We provide fund trustees with assistance in navigating the superannuation environment, to ensure that your fund remains up-to-date and that it poses no risks to your current situation.
We advise on compliance with superannuation legislation in the following areas:
- Eligibility for contributions
- Tax deductibility of contributions
- Eligibility for benefit payments
- Taxation of benefit payments
- Limited recourse borrowing arrangements
- Permitted investments
- Use of related unit trusts
- Appropriate documentation
- Review of financial statements, member statements, investment strategy, trustee minutes and working papers
- Reports on any deficiencies or omissions
- Recommendations on remedial action
- Assistance to ensure future compliance
- Assistance with Australian Tax Office reviews/audits of funds
- Assistance to fund trustees who may have breached the legislation, including development of a rectification program and liaison with the ATO.
Retirement and planning
We provide you with advice on the structure of your SMSF to ensure that benefits are secure in the accumulation and income stream phase, and that on your death they are directed to your beneficiaries in accordance with your wishes. Dhir & Associates provides:
Recommendations on, and review of, fund structures
- Admission of new member documentation
- Fund administration
- Wind-up of SMSFs
- Trust deed reviews
- Benefit payments, including:
- Lump sum withdrawals
- Pension commencements
- Death benefits.
SELF MANAGED SUPERANNUATION FUND
- We use a highly skilled team of superannuation professionals to regularly review your personal circumstances and proactively provide you with advice on opportunities and strategies to maximise your accumulating wealth. We ensure that you are considering your superannuation options on at least an annual basis so that when you reach retirement, your wealth has accumulated in the most tax-effective environment possible.
- To make the most of your retirement savings, you need to look very carefully at a number of issues, including getting the right advice to help you implement the most suitable structure for your individual requirements. Depending on your personal, family and business circumstances, a Self-Managed Superannuation Fund (SMSF) may be a suitable structure in which to build your retirement savings.
- Broadly, there are two options available to you for your superannuation: an APRA regulated fund or a Self-Managed Superannuation Fund (SMSF). There are many benefits associated with each, but it is the benefits of a SMSF that allow you the greatest potential to maximise your retirement savings. SMSFs provide:
- Flexible investment options
- Potentially lower fees
- Flexible estate planning.
What is a SMSF?
- A SMSF is a small superannuation fund established for one to four people, with the fund being controlled by trustees/directors who are also the members. Control is kept in the hands of the members, and the members decide how the fund will operate and what investments the fund will invest in.
- In general terms, SMSFs are governed by the Superannuation Industry (Supervision) Act 1993 (SIS Act) and are regulated by the Australian Taxation Office (ATO).
- A SMSF requires a Trust Deed, which is essentially the rule book by which the SMSF must operate in conjunction with the SIS Act.
- Membership of a SMSF is limited to fewer than five members, all of whom are often family members or related through business, e.g. business partners. NB: a member cannot be an employee of another member unless directly related, e.g. spouse/spouse, father/son etc.
- A SMSF is required to appoint a Trustee (individuals or a company), which comprises all fund members. Special arrangements can be made for a single member SMSF.
- The rules and legislation surrounding superannuation are continually changing; therefore, the Trust Deed should be reviewed regularly to ensure that it continues to comply and meet the members’ needs well into retirement.
- A word of warning — not all Trust Deeds are the same. A cheap, off-the-shelf deed may meet the members’ immediate needs, but it may limit their ability to use the SMSF for estate planning and asset protection. It is imperative that members get properly considered advice, tailored to their specific circumstances.
What are the advantages of having a SMSF?
- Members of a SMSF have complete control and responsibility of their retirement investments, albeit within the legislative guidelines of the SIS Act. Members also have absolute discretion with respect to the choice and style of assets that the SMSF invests in.
- This makes it simple for members to incorporate the structure of their SMSF into their overall wealth management strategy.
- A properly designed SMSF structure can offer the flexibility and security to take retirement savings from the accumulation stage right through to retirement, and provide an income stream that will maintain or enhance members’ living and cash flow requirements.
- SMSFs enjoy significant tax breaks in Australia, where the most tax a SMSF will pay is 15%, provided that the fund is maintained as a continually complying superannuation fund.
- A SMSF can be a powerful tool for family groups wanting to take advantage of estate planning opportunities that are available, by using the SMSF alongside the family’s overall wealth management and succession strategy.
What is the downside to having and managing a SMSF?
- Members may find that they spend some additional time signing documents and managing the SMSF’s investments. However, this may be reduced by engaging specialist administration and investment services.
- The cost to the SMSF of non-compliance could potentially be a tax penalty of up to 46.5% on the fund, and prosecution of the trustee(s).
- Ongoing administration and compliance costs may be prohibitive for members with small balances. SMSF industry guidelines suggest a SMSF can be more cost-effective compared to other super arrangements when a member’s assets reach $250,000 to $300,000.
- A SMSF must be established for the sole purpose of providing benefits to members on retirement or to their beneficiaries in the event of the member’s death. A SMSF cannot be used to provide benefits outside these parameters, such as loans to members or other ancillary benefits.
Dhir & Associates can help you set up your own SMSF and ensure that it remains up-to-date and relevant to you.