Based place/s to learn about SMSF

[sashatheman]

Hi all

My dad who does't have the best English gave me an assignment to read up and report back on self managed super funds (SMSF). Especially when it comes to buying property. He told me he has about 200k in his and about 100k in my mums.

I did some quick searching and found that anything less than 200k is not worth it because of higher fees? Is there anywhere that breaks down the fees more specifically?

Also when it comes to buying property with SMSFs how are the running costs paid for? I need to know such details but i can't see to find much.

I read that there are more regulations and paperwork. What exactly does this consist of?

Any suggestions?

Thanks in advance.

 

[Terry_w]

Google the 'sis act' and 'sis regulations' and have a read. There are also some basic books on the subject - try to get something recent and it will be more up to date..

fees:
Set up of the SMSF trust
Set up of the company trustee

each year the smsf will need accountaning done. this will vary depending on what it owns. around $700
An audit will also need to be done with a different person than the one that does the acccounts. Audits cost around $700

If the fund is buying property and borrowing then also needed is:
Custodian trustee
custodian deed - some banks provide sample deeds you may be able to use

The lender may also insist that you need financial advice and/or a financial planner sign off. To do this a Financial Planner would have to issue you with a statement of advice and this takes a number of hours and is costly.

Conveyancin on the property is stratight forward, but there is an extra step in regards to stamp duty because of the bare (custodian trust) so slightly more expensive than usual. Make sure you use a lawyer and not a conveyancer who cannot advice on the sis act and related issues.

Also the lenders tend to charge xtra fees because of the extra complexity and the bank lawyers having to check everything.

Most of these are one off costs and then once it is going it would cost maybe $1500 per year to run.

 

[TPI]

Hi sashatheman,

Here are some websites that I've found useful in the past:

www.thesmsfreview.com.au

www.superguide.com.au

Also for low cost SMSF administration try:

www.esuperfund.com.au

There are others too, see this comparison table:

http://www.thesmsfreview.com.au/comparison-table-smsf.html

I started a SMSF with a much lower balance, but it is all in shares.

If you're going to use it to buy a property, then the balance does need to be higher.

 

[sashatheman]

Thanks guys. Much appreciated.

 

[Aaron_C]

Google the 'sis act' and 'sis regulations' and have a read.

Terry, not even lawyers read legislation and understand it

 

[Future Assist]

you can read some more about what an SMSF will cost here, but typically it is broken down into 3 parts:

1. initial set up / company creation and ASIC fees (and more because you will need a bare trust if you are borrowing money for property investment / Limited recourse borrowing requirements)

ASIC annual return fee:
_ Trustee Company of the Self Managed Super Fund ? currently $43 p.a.
_ Trustee Company of the Security Trust ? currently $230 p.a.​

2. annual audit fees (typically around $500)

3. ongoing accounting/tax return fees. (typically between $99 and $1000 depending on the complexity of your investments and transactions throughout the year).

+ ATO SIS Levy (charged with annual tax return) ? currently $259


but can also include...

- ongoing annual or monthly administration and compliance costs (depending on your investments)

- portfolio or investment costs, and

- any professional adviser fees and charges depending on whether or not you need a professional investment strategy with your fund (recommended by the ATO).

Bets of luck!