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Features of SMSF

The main features of self managed superfund are below.

Full control

You, the trustee, take responsibility for managing the self managed superfund. You manage the investment strategy and investment process. Hence, you decide the investments for the superfund and the timing to make those investments.

You are in a unique position to create a superannuation investment portfolio that meets your exact needs.

Investment choice

Self managed superfund can offer the perfect opportunity for you to invest your superannuation in a wide range of assets.

Self managed superfund can invest in most investment products including managed funds and direct assets such as shares – listed and unlisted, Australian and overseas, listed and unlisted property trust, bonds and derivative products like warrants and options.

In addition to the wide choice above, some investments will only be available exclusively through self managed superfunds. These include real property and collectables.

Tax benefits

Like other superannuation funds, self managed superfunds offer significant tax benefits to individuals who choose to save in this type of structure. As the rate of taxation is lower than person income tax rates, your money held in superannuation grows at a quicker rate.

When you are in accumulation phase:

When you are in pension phase (fund assets are held solely for the purpose of paying a current pension), all income earned and realised capital gains are exempt from tax within the superfund.

If the self managed superfund holds Australian shares directly, any tax payable by the fund may be reduced by franking credits on dividends. For example, contributions and earnings taxes can be reduced or offset. If the franking credits exceed the tax payable, the excess amount is refundable. When in pension phase, as no tax is payable on income earned or realised capital gains, the franking credits are refundable in full.


The rules governing self managed superfunds inherently provide the members with significant flexibility that is not available to other superannuation funds. In addition to the flexibility that results in tax benefits, a self managed superfund may acquire business real property from a member or other related party of the fund.

Other benefits

Life insurance

Members of self managed superfund are able to obtain both life and income protection insurance cover through the self managed superfund. The advantage of this approach is that the premium is paid by the superfund and is a tax-deductible expense to the superfund.

As Reasonable Benefit Limits have now been abolished, there is no longer a barrier for those members who need higher life insurance to obtain that cover through self managed superfund. Reasonable Benefit Limits are the maximum amount of retirement benefits a person can receive over that person’s lifetime at a concessional tax rate.

Effective transfer of wealth

For most people, superannuation savings is their largest asset or second largest asset after the family home. Hence, it is prudent to ensure your superannuation savings can be transferred between generations effectively.

Self managed superfunds’ inherent flexibility allows you to design arrangements to facilitate effective wealth transfer.

Retirement income

Self managed superfunds can pay members benefits in the form of a retirement income stream, including transition to retirement income stream. As fund trustee, you can tailor the payments to meet your needs.

Unrivalled security

You, as trustee, manage the self managed superfund. In managing your superfund, you will always protect your interest. Your superannuation assets are held by you as trustee – you will know at any point in time where your superannuation is invested and how they are performing. You will also have the comfort of knowing that your superannuation is in safe hands – your own.