It works the same as a retail superannuation fund. It accepts
contributions from members, and invests and manages those contributions
and subsequent earnings. Importantly it must pass the “sole purpose
test” of being set up for the sole purpose of providing retirement
benefits.
You will be required to be a trustee of the SMSF and be involved in
the decision making process of the fund. This means you will be
responsible for tasks such as administration and accounting, managing
tax implications and ensuring an investment strategy is in place.
The trustees of a SMSF are responsible for ensuring the SMSF remains
compliant with the law. Your SMSF can have up to a maximum of four
members (e.g. you, your partner and your children).
QWhat are the benefits of a SMSF?
You have control over how and where your money is invested
Generally, there can be fee savings if you have more than $200,000 invested
SMSF's offer the potential to use tax savings strategies not possible in other types of funds
SMSF's can purchase your business’ real property
Q What are the limitations of a SMSF?
You are responsible for making sure your fund complies with regulations
You have to administer the fund (or pay a company to do it)
Penalties for non-compliance range from financial penalties to imprisonment
You are required to prepare, implement and regularly review the SMSFs investment strategy
Q Where can I get more information
The Australian Taxation Office (ATO) has some useful guides in relation to self managed super:
