A SMSF is a trust with its own deed and set of rules which complies with superannuation laws, with the fund members being the beneficiaries.
A SMSF has a similar role to any other super fund; however, the difference is that the members of a SMSF are generally also the trustees. They control the investment of the income of the fund (including contributions).
A SMSF needs to meet several requirements. The requirements are different depending on whether your fund has a corporate trustee or individual trustees.
If your fund has individual trustees each member must be a trustee, and must have four or less members.
If your fund has a corporate trustee each member must be a director of the trustee company.
There are other rules which facilitate a single member fund.
A SMSF is most appropriate for investors:
- Prefer to have direct control over investments and beneficial ownership
- Prefer greater investment transparency
- Prefer greater flexibility in the choice of investments and want greater involvement in the investment decision process
- Wish to take advantage of the greater flexibility and estate planning benefits associated with a SMSF