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Irina Hollander & Associates Pty Ltd Chartered Accounts

Why Self-Managed Super is Better?

There are plenty of advantages of managing your own super in general. This would explain the exponential increase in the numbers the SMSFs have experienced since 1994. (According to the Australian Prudential Regulation Authority and ATO statistics to March 31, 2014, there are 528,700 SMSFs with $558 billion in assets).

Below are the main 5 advantages:

1) SMSFs are multi-generational and last forever, so passing of retirement wealth and estate assets from generation to generation is possible.

2) Better super changes in 2007 have brought in the deductibility to the fund of death, permanent and temporary disability insurance premiums paid by the Fund in respect of its members. As per Swiss Re Economic Research & Consulting, 2007, Australia is one of the most underinsured nations in the developed world ranking 16th for life insurance.

3) Choice of investments. This is a key driver to establish a SMSF.
The borrowing restrictions for SMSFs have been partially lifted. The funds are now permitted to borrow for strictly investment purposes. Should your SMSF consider an investment in real property, there are a couple of options available to suit your personal circumstances.

4) Simplicity of implementation of tax minimisation strategies involving superannuation. There is no bureaucratic, time consuming barrier of a large and slow-moving master or industry fund between you and your SMSF.

5) Less tax payable from your superannuation savings. Have you ever looked at your master fund statement to notice that your employer contributions are taxed at 15%, then to see a deduction for account management fees from the remaining balance?
In contrast to how master and industry funds are taxed, SMSFs are able to deduct any associated expenses out of contribution income before being taxed at 15%. Who is going to be better off long-term?

For more information please contact Irina Hollander CA.

The information provided above is of a general nature only and should not be relied upon as a substitute for specific professional advice.