Today, many Australians are looking forward to gaining control over their superannuation, as they’ve grown more interested in it. This is connected with the fact that about one-third of the overall superannuation funds are held by SMSFs, and are usually the favoured option for individuals who are particularly active with their superannuation and retirement schemes.
If you’re considering doing the same, here are five significant benefits of a Self-Managed Superannuation Fund (SMSF):
1. Tax-effective Investment
When it comes to providing tax advantages, having control over the timing of purchase or sale of fund investments is extremely important. For tax purposes, the SMSF is regulated in the same manner as the more considerable funds, but with increased freedom in adding direct efficiencies using different tax laws. For instance, the right to delay the purchase or selling of investment can result in a curtailment in the fund’s taxable income.
2. Cost Saving Potential
As opposed to other superannuation funds, the cost benefits of the SMSF may differ based on the conditions of the investment. Generally, a low-balance SMSF can be comparatively cost-inefficient when contrasted to more considerable funds. If expenses are a preference over stability and regulation, keep a close eye on the actual value of both SMSFs and more considerable funds, and then wait for the most valuable time to make a move.
3. Estate Planning Benefits
The SMSF is an optimal vehicle for estate planning. When more SMSF members eventually retire or approach retirement, estate planning becomes a critical factor in ensuring that all assets accrued for members are distributed to the right beneficiaries. This is usually carried out with the use of reversionary pensions or binding death benefit nominations.
4. Effective Asset Protection
SMSFs have an efficient means of securing their members’ assets from the potential possibility of debt, bankruptcy, or other complaints by creditors. This can make them highly appealing for business owners and other professionals.
5. Offers Transparency
SMSFs provide considerable clarity that helps trustees to match their objectives with their investment strategies. Suppose you’re curious about property, shares, or responsible and sustainable investments. In that case, SMSFs offer a forum that focuses on allowing you to understand where your capital is being spent, with maximum control over tax treatment.
Our team of professional’s at Accounting Tax Solutions in Gold Coast, Australia can help. Call us on 07 5559 1200 or fill out our contact form to get started today!