Self-Managed Superannuation Funds (SMSF) is funds that provide the opportunity to maximise a person’s retirement income.
Self Managed Super Fund
Using your Self Managed Super Fund to secure your retirement as never been easier. Before September 2007. The capacity to use borrowed money to purchase an SMSF asset, such as real property, was extremely limited.
At Solution Home loans we believe Super Fund home loan is a great option for a better retirement, if you already have an SMSF or if you’re planning to establish an SMSF and interested in buying a residential property.
Lenders that can lend you money through your Self Managed Super Fund, most will lend, Loan to value ratio depending on the lender.
- Up to 70% where SMSF trustee is an individual
- Up to 80% where SMSF trustee is a company
A Self Managed Super Fund (SMSF), also known as Do It Yourself (DIY) Super, is a Superannuation Fund you establish and run yourself.
Many Australians are now choosing to manage their own superannuation.
Benefits of an SMSF:
- Investment control
- Estate planning flexibility
- Effective tax management
- Greater investment flexibility
- Capacity to pool your super with up to three other individuals.
Most superannuation funds will allow you to invest into shares, fixed interest and property via managed funds – but often with strict restrictions. SMSFs however, offer a large range of additional investment options, including direct property, physical gold and other commodities, derivatives, and subject to various requirements, SMSFs also offer the flexibility of gearing with your investments, whereas APRA regulated superannuation funds generally do not offer gearing.
Many industry experts say that beyond choice, the real benefit a SMSF is the ability to have more sophisticated investment strategies working for you.
SMSFs offer greater flexibility with estate planning needs. You can set up and leave tax advantaged income streams to dependent beneficiaries. SMSFs can also make binding death benefit nominations that do not lapse, unlike many public offer super funds, which tend to require binding death benefit nominations to be updated every 3 years.
Effective tax management
Control and flexibility over your SMSF investment decisions affords you the ability and means to consider tax when managing your fund’s investments.
The current SMSF tax rate on income at 15% is one of the lowest of any entity in Australia. This can potentially be reduced further as income from eligible pension assets are not taxed, and benefits can arise from the imputation credits connected with Australian shares. Further, you can also control exactly when to dispose of assets – this can minimise, or potentially eliminate a capital gains tax liability.
Greater investment flexibility
For many SMSF members choosing where your retirement savings are invested with greater flexibility in investment options is a winning combination. This hands-on approach can mean, for example, as market conditions change you can quickly respond by adjusting your investment portfolio.
A SMSF structure also means you can roll your funds into an account based retirement pension or a pre-retirement transition to retirement pension and still exercise flexibility and control over your investments. Also, while you’re receiving your eligible account based pension, any income earned on those assets, or capital gain realised, should be exempt from income tax.
Capacity to pool your Super with up to four individuals
SMSFs provide you the ability to pool your resources with up to a maximum of four members. For many Australians, this has translated into a growing number of family run SMSFs. This increased investment pool allows you to potentially access lower administration costs as well as accessing investment opportunities that may not be available to smaller investment amounts.
At SHL we recommend that you have a preliminary discussion with your accountant or qualified financial planner to discuss further in details, updated information about SMSF, the legal & cost requirement in setting up and managing a Self Managed Super Fund.
Our network of financial advisers can provide you with professional advice and services, to make an appointment, Contact Solution Home Loans today.