What an SMSF is
An SMSF is a private super trust with up to six members, all of whom are generally trustees (or directors of a corporate trustee). The ATO regulates SMSFs, and each fund needs an annual independent audit.
Why people choose one
- Control over investment choice, including direct shares and property.
- Business real property: a business owner’s fund can own the premises and lease it to the business at market rates.
- Family members in one fund.
- Estate planning flexibility.
What to weigh
- Fixed costs (accounting, audit, ATO levy) mean small balances can pay a lot in percentage terms.
- Time and responsibility: investment strategy, record-keeping, valuations.
- Rules: the sole purpose test, in-house asset limits, related-party restrictions and borrowing (LRBA) rules.
- Insurance usually needs to be arranged separately.
Read more: our SMSF advice, buying business premises in an SMSF and SMSF trustee duties.
Quick answers
How many members can an SMSF have?
Up to six.
Does an SMSF need an audit?
Yes, an approved SMSF auditor must audit it every year.
Sources
General advice warning. This article is general information only and does not take into account your objectives, financial situation or needs. Rules and thresholds change; check the sources above. Consider the relevant PDS and our Financial Services Guide and seek personal advice before acting. FinForce is authorised under Financial Force Pty Ltd AFSL 238337. Shay has been authorised since 18 October 2011.