Read before you decide
Before setting up a Self-Managed Super Fund (SMSF), you need to consider the risks and responsibilities in the long-term operation of a SMSF.
Establishing and running a SMSF comes with a commitment for the trustee(s) to be aware of and continually improve their knowledge about all aspects of their fund. This responsibility rests with all trustee(s) who must sign off on every document.
If you get it wrong, there are significant consequences if you fall foul of the ATO with penalties as high as $50,000.
For example, one of the most common mistakes committed by the trustee(s) of SMSF is the Sole- Purpose test – specifically in the separation of in- house assets and borrowings – better known as limited recourse borrowing arrangements.
This is just one of the many challenges SMSF trustee(s) face. Therefore, it is recommended that the trustee(s) become fully conversant with how to run their SMSF and seek advice from their independent adviser(s) or the ATO (web site).
Contact Paul today if you have any questions regarding the pros and cons of setting up a SMSF