A trustee is a person, or a legal entity, responsible for running the fund and acting in the best interests of the members. As a trustee you need to manage the fund and its investments separately from your own affairs.

The choice of using a corporate trustee or individuals depends on a number of factors.

A corporate trustee is generally favoured because:

• It allows ease of change in membership
• Fund asset ownership does not change on member changes, and
• The corporate trustee survives the death of a member

Managing your own super is a big responsibility. There are strict rules that govern how you can use a self-managed superannuation fund (SMSF), how you can invest your money and when you can get at it.

However if you want to maintain a high level of control of your investments for retirement, a SMSF may be the right choice for you.

The advantages to have a SMSF are

• control of the fund’s investment strategy
• control of the design and operation of the fund
• broad strategy, capability and flexibility
• benefits for small business owners
• control over the tax treatment of beneficiaries and the fund
• potential fee savings
• no sophisticated prudential requirements

Our staff are fully qualified CAs and CPAs with years of practical experiences in SMSF compliance and advice. We have in-house financial planners and accredited SMSF specialist by the Institute of Chartered Accountants in Australia. We invest a lot of time and money in staff training each year to ensure that we have the most up to date technical skills to provide you adequate advice. You can be certain that your SMSF will be looked after in the right hands.

We understand that our clients are looking for the best value out of the investments in SMSF and with their accountants. We proudly offer you very competitive prices in the market without comprising the service standard. We believe that our prices are a fraction of the fees offered by the second tier and mid-tier firms and at least 10% cheaper than suburban firms. Most importantly we guarantee that you get the same standard advice. Statistically 98% of our clients are satisfied with our professional services.

1. Constructing a trust deed
2. Appointing trustees
3. Electing for the fund to become a regulated fund
4. Obtain a Tax File Number and an Australian Business Number, and register for GST if applicable
5. Formulating an investment strategy for the fund
6. Holding assets and establishing a bank account
7. Rollover funds from other super funds e.g. an industry fund if applicable
8. Obtaining insurance, and
9. Appointing an auditor

Once an SMSF is established, the trustee should then consider developing suitable strategies for members in areas including:

1. Retirement incoming planning
2. Estate planning, and
3. Disability planning

The term of contribution is not defined in the Income Tax Assessment Act 1997 (ITAA 1997). According to the ATO, the ordinary meaning of a contribution is:

‘anything of value that increases the capital of a superannuation fund provided by a contributor whose purpose is to benefit one or more particular members of the fun or all of the members in general.’

Not every increase in the capital of the fund is a contribution.

For example, increases in the fund’s capital due to income, profits and gains arising from the use of the fund’s existing capital will not be a contribution. The proceeds of an insurance policy received by the super fund when an insured event arises is also not a contribution.

The capital of a superannuation fund can be increased directly by providing it with cash funds, or where permitted, transferring and existing asset by way of in-specie contribution (e.g. listed securities and business real property).

The capital of a superannuation fund may also be increased indirectly in a number of ways. For example where an employer pays the cost of insurance premiums for its employees directly to the insurer on behalf of the superannuation fund (who would normally pay premiums).

A contribution is made when the funds are received by the trustee of the superannuation fund.

Where a contribution is made by way of a transfer of an asset, the contribution will be deemed to have been made when the superannuation fund obtains ownership of the asset from the contributor. For this purpose, a fund obtains ownership when beneficial ownership of the asset is acquired by the fund, which can occur earlier than legal ownership.

For example, a fund may acquire beneficial ownership of listed shares, effected through an off-market share transfer, when the trustee of the fund obtains the properly executed off-market share transfer in registrable form.

In the case of real property a superannuation fund acquires beneficial ownership when its trustee obtains possession of a properly executed transfer that is in registrable form, together with any title deeds or other documents necessary to procure registration of the fund as the legal owner of the land.

With respect to in-specie superannuation contributions, the amount of the contribution is the market value of the asset at the time the contribution is received by the SMSF trustee.

Where a person contributes an asset to a SMSF trustee that provides consideration for the transfer of that asset, the contributed amount is the amount by which the market value of the asset exceeds the consideration paid by the SMSF trustee.

The capital of a superannuation fund may be increased directly by:

• Transferring funds to the superannuation provider (including transfer of a person’s benefits from an overseas superannuation fund)
• Rolling over a superannuation benefit from another superannuation provider. The ATO does recognise a roll over as a contribution, it does not generally have any contributions cap consequences
• Transferring an existing asset to the superannuation provider (in-specie contribution e.g. listed securities and business real property)
• Increasing the value of an existing asset held by the superannuation provider.

The capital of superannuation fund may be increased indirectly by:

• Paying an amount to a third party for the benefit of the superannuation provider
• Forgiving a debt owed by the superannuation provider
• Shifting value to an asset owned by the superannuation provider

The majority of contributions made to Australian superannuation funds will be made directly via a transfer of funds and rollovers from another provider. In-specie and indirect contributions are more prevalent in SMSFs.

Concessional contributions

• Employer contributions (including SG and salary sacrifice)
• Personal deductible contributions
• Member contributions made on behalf of the member by another person
• The taxable component in excess of $1 million arising from DTP
• Certain amounts allocated from a funds’ reserve

Amounts allocated from a fund’s reserve to a member’s account will be included in the members cap except where:

• They are allocated in a fair and reasonable manner to an account for every member or class of member in the fund, and
• The amount allocated for the financial year is less than 5% of the value of the member’s interest in the fund at the time of the allocation, or

The amount is allocated from a reserve for the purpose of enabling the fund to meet pension liabilities

Non-concessional contributions

• Personal contributions for which no tax deduction is claimed
• Excess concessional contributions
• Spouse contributions
• Proceeds from the sale of small business that are contributed to super if the amount did not qualify for the 15-year or retirement CGT small business exemptions

The following amounts are excluded from non-concessional contributions:

• Government co-contributions
• Contributions arising from the structured settlements or orders for personal injuries
• A contribution to a constitutionally protected fund
• A rollover amount
• The tax free component of a directed termination payments
• Proceeds from the disposal of assets that qualify for the small business 15 year exempt or the $500,000 retirement exemption that are contributed to super as long as they are counted towards and do not exceed the lifetime CGT cap

Non-concessional contributions are capped at $150,000 per person per year. To accommodate larger contributions, people under age 65 (at any time in the financial year) will be able to bring forward future entitlements to two years worth of contributions, giving them a cap of $450,000 over three years (provided they are under age 65 at any time in the first year).

People aged 63 and 64 who take advantage of the bring-forward measure will not be required to meet the work test in either of the following two financial years.

People aged 65 to 74 will only have a non-concessional contributions cap of $150,000 per year provided they satisfy the work test (gainfully employed on a least a part-time basis of 40 hours over 30 consecutive days during the financial year in which the contribution is made).

Example

Janet is 64 years of age and makes a contribution of $450,000 to her super fund in 2011/12. Janet does not have to satisfy the work test in either of the following two financial years in respect of the $450,000 contributions made under the bring forward arrangements.

For 2012/13, being $65, Janet will have to satisfy the work test in order to make contributions. Any additional non-concessional contributions Janet makes before 1 July 2014 will be in excess of her cap and will result in a tax liability.

If Janet satisfies the work test in 2014/15 financial year she will have non-concessional contribution caps for that year of $150,000 (subject to increases in the concessional contribution cap). Contributions in excess of $150,000 will exceed her cap and will result in a tax liability. Being over 65, she will not be able to bring forward future entitlements to increase her cap (as she did in 2011/12).

Superfund Works not only deliver the annual reports to meet the minimum requirements imposed by the SMSF regulator – the ATO but also deliver customised value added reports at no additional costs. Below is a list of reports you will receive from us

• Balance sheet
• Detailed Balance Sheet
• Income Statement
• Detailed Income Statement
• Cash Flow Statement
• Notes to be the Financial Statements
• Compilation Report
• Independent Audit Report
• Statement of Taxable Income
• Deferred Tax Reconciliation if applicable
• Trustee Minute/Resolution
• Member Statements
• Members Summary Report
• Member Contribution Caps Report if applicable
• Pensions Summary Report if applicable
• Investment Summary Report (with yields)
• Investment Summary Report
• Investment Change Report
• Investment Summary Pie Graph by Ledger Account
• Investment Summary Pie Graph by Asset Allocation
• Detailed Schedule of Fund Assets
• Investment Movement Report
• Projected Investment Disposal Profit/(Loss) Report
• Investment Disposals Summary Report
• Investment Income Report
• Total Investment Return Report
• Dividend/Distribution Comparison Report if applicable
• Investment Strategy Comparison Report
• Rate of Return Comparison Report
• Detailed Purchase and Disposal Report if applicable
• Pooled Members Balance Sheet if applicable
• Pooled Members Income Statement if applicable

SMSFs are generally wound-up for one or more of the following reasons:

• the trustee does not have the time and/or expertise to effectively manage the fund
• all the members have left the fund
• all the available benefits have been paid out of the fund or
• the members intend to move overseas permanently (meaning that the fund will no longer meet the definition of an ‘Australian superannuation Fund’, and therefore will cease to be a ‘resident regulated superannuation fund’.

There are different reasons that a SMSF is required to be wound up. As a trustee, you have some responsibilities if you decide to wind up your SMSF.

In summary the trustee needs to

• Review the super fund’s trust deed
• Lodge all activity statements with the tax office if applicable
• Pay any remaining liabilities or request refunds where they are due
• Roll over and/or pay out the members’ benefits
• Prepare and lodge the final SMSF annual tax return
• Have an audit conducted by an approved auditor
• Notify the tax office with 28 days of the fund being wound up
• Close the bank account after all debts are paid