What is an SMSF?

An SMSF is a specialist form of superannuation fund where control remains in the hands of the members who decide how the fund will operate and what investments will be made. An SMSF may have up to 4 members which means you can establish one with up to 3 other family members or friends.

How does an SMSF work?

All members of the fund will be trustees of the fund. They may act as individual trustees or establish a company and be directors of this trustee company. These trustees will control the SMSF and all investment decisions within it. This means that you as the trustee of your fund will be able to decide how your fund invests and what it decides to invest in to best fund your retirement.

The trustees assume the responsibility for complying with all legal obligations and Sapient Superannuation is there to guide trustees through the establishment, ongoing compliance and investing process to ensure you remain within the confines of the law. Each year Sapient Superannuation will prepare and lodge the tax return for the fund as well as the financial statements.

Are SMSF’s cost effective?

Often the cost of establishing and administering an SMSF is cheaper than the combined fees that you and the other members are currently paying at your existing super funds. 

Sapient Superannuation charge flat rate fees that do not increase when the value of your investments increase, and, do not increase if the number of members in the fund increases. If you combine your superannuation balances with more members then you will still be charged one flat SMSF fee, and therefore save on the fees being charged across multiple funds.

The flat rate fees will depend on the type of investments that are being made. For example if you are just holding cash and trading shares this will be a slightly lower fee than if you want to hold property and a loan. Talk to us about the types of investments you intend to hold and we can advise you on the likely fixed costs.

A comprehensive list of the Sapient Superannuation fee structure is available under the 'our service' tab.

The primary concern for investors should be the question of what an SMSF allows them to do that they can’t do now, and what does their SMSF provider deliver in terms of service and comprehensive advice. The wrong advice from a cheap provider can cost a fund tens of thousands of dollars so it is important to use a provider with strong credentials that is independent of the large institutions who often regulate what bank accounts can be opened and what investments the fund can make. At Sapient Superannuation there are no restriction on what investments trustees can make, provided they are within superannuation regulation.

How do I establish an SMSF

To establish a SMSF trustees will complete and application form and sign a trust deed. The trust deed will outline how the SMSF is governed and the rules and regulations it must abide by.

Sapient will establish the trust deed as well as the SMSF bank accounts and facilitate the rollover of the funds from your current super accounts.

What about the taxes?

An SMSF has all of the tax benefits that the legislation provides. While in the accumulation phase your SMSF will have income taxed at a flat rate of 15%, and capital gains will be taxed at a flat rate of 10%.

When your SMSF is funding your pension (in pension phase), all income and capital gains on the pension account will be subject to zero tax.

Benefits of the Sapient SMSF Experience

  • Live online reporting in one place of all your holdings; cash, term deposits, shares, options, & property
  • You don’t need to do anything we take care of all paperwork and all ongoing obligations
  • We ensure your fund remains compliant
  • Access to the best superannuation minds in Australia

Who might an SMSF suit and what can you invest in?

With almost 1 million Australians now being members of an SMSF, the appeal is clearly widespread as SMSF’s attract a diverse range of investors wanting to;

  • Take more control of their retirement savings
  • Invest into Australia residential property
  • Invest into foreign shares
  • Invest into foreign property (US property has been very popular recently)
  • Invest into property options
  • Invest into land banking strategies
  • Trade options, CFD’s, foreign currency
  • Use leverage to buy property
  • Use leverage to buy shares
  • Acquire commercial property to lease back to their business
  • Take advantage of small business tax concessions when selling a family business
  • Better manage their estate and succession planning
  • Protect their assets from future liabilities or bankruptcy