Self Managed Super

[jono1887]

I've been wondering how you go about managing your own super? And are you allowed to contribute to your super from income you earn from trading? Is this contribution eligible for the govt co-contribution scheme?

I would like to start up my own super fund and channel some of my profits to it to gain the co-contribution and manage it myself...

 

[jono1887]

Also, are contributions made to super this way tax deductible??

 

[awg]

IMO, it all depends on how old you are.

I trade in my SMSF in pension phase, so I pay no CGT, and almost no income tax.

If you are a young guy though, which I sense you are, there is no point, except that income in super is taxed at 15%.

so unless your average tax is above that.

the biggest prob with super is that u cant withdraw until u meet the conditions, ie 55+, and the Govt keep mucking with the rules.

If u want to set up a cheap superfund, check out Esuperfund..$600pa audit, was no setup fee, by far the cheapest

 

[Aussiest]

I'm just wondering awg, or anybody else who's reading, couldn't you put a designated amount into a high interest earning account each week and call that 'your super'? You'd have to be pretty disciplined though.

Any thoughts?

(At least the Govt. couldn't get it's grubby hands on it).

 

[investorpaul]

If u want to set up a cheap superfund, check out Esuperfund..$600pa audit, was no setup fee, by far the cheapest

I never knew you could get it done so cheap.

I am definately setting one of these up. I hate all superfunds there fees are either too high or their performance to low.

I would much rather manage my own super fund. AWG in your opinion what amount of super would you need to make it worthwhile (ie enough to cover fees and growth the account)?

 

[awg]

I'm just wondering awg, or anybody else who's listening, couldn't you put a designated amount into a high interest earning bank account each week and call that 'your super'? You'd have to be pretty disciplined.

Your thoughts?

Certainly..but in order to enjoy the taxation advantage, you would need to have a superannuation account properly set-up.

When I said age is most important, the amount you have is also paramount.

Even Esuper advise minimum $50k to start SMSF.

Otherwise, you are much better just contributing to a low cost industry fund, in the Cash option, if Cash is where u want to be.

admin of a SMSF is a PITA.

http://www.esuperfund.com.au/

 

[investorpaul]

Even Esuper advise minimum $50k to start SMSF.

I have worked full time for a few years now, I just did the quick sums and it will prob make sense for me to do this in a couple of years.

I'll have to set a reminder, my current super funds ok but I would much prefer to manage my own.

 

[Aussiest]

Certainly..but in order to enjoy the taxation advantage,

Could you save $30-40k, enough for a deposit on a property, buy the property and use the balance of the rent as your super contribution?

Assume i have stamp duty covered (add $15k to figures quoted above) and have found property which will give me a sensible return on my investment.

I'll research the tax benefits of super tomorrow.

 

[awg]

Could you save $30-40k, enough for a deposit on a property, buy the property and use the balance of the rent as your super contribution?

Assume i have stamp duty covered (add $15k to figures quoted above) and have found property which will give me a sensible return on my investment.

I'll research the tax benefits of super tomorrow.

I dont think you can do that.

You can/could borrow via a special Installment loan, to buy property in Super, but these have conditions, including a conservative level of gearing, I dont think negative gearing is permissible.

So you need to stump up about 40% of purchase price.

You would need an accountants advice

Simpler Super is bullsh!t

here is a link for you, plenty similar, google "property investment in super"

http://www.behanlegal.com/Knowledge...nBorrowtobuyRealEstate/tabid/332/Default.aspx

 

[Julia]

I'm just wondering awg, or anybody else who's reading, couldn't you put a designated amount into a high interest earning account each week and call that 'your super'? You'd have to be pretty disciplined though.

Any thoughts?

(At least the Govt. couldn't get it's grubby hands on it).

We already have several threads on SMSF's. Before starting a new one, might be good to do a search and add to an existing one as it becomes messy and confusing.

Mods: if you get a chance, perhaps merge this thread?


Here is one with fairly comprehensive discussion.

https://www.aussiestockforums.com/forums/showthread.php?t=819&highlight=managed+super

Re your suggestion above: if you set up a SMSF, then there is nothing stopping you from putting it all into a 'high interest account'. Not sure where you will find such an entity at present, though.

But if you thought you wouldn't bother setting up a SMSF and would just put cash into an ordinary account, calling it Super to get the tax advantage, then no, you could not do that.

Don't underestimate the rules which attach to SMSF. ATO takes these very seriously.

Before deciding, I'd suggest you search the ATO and ASIC websites for all the info about SMSF's.

The main point of Super, whether public or self managed, is the low tax environment. Super is simply a vehicle for holding assets in a tax advantaged environment, i.e. 15%.


The government doesn't get its hands on SMSF money, except for the tax paid.

I never knew you could get it done so cheap.

I am definately setting one of these up. I hate all superfunds there fees are either too high or their performance to low.

I would much rather manage my own super fund. AWG in your opinion what amount of super would you need to make it worthwhile (ie enough to cover fees and growth the account)?

Depends on what outlay you have on accounting and audit costs.
As has already been mentioned, there are the budget organisations like E-Super.
I prefer to have my own accountant, and a separate auditor.
Usually allow around $2000 p.a. for tax return, audit and ongoing advice where required. More than worth the money imo.

The concensus re minimum amount is usually suggested to be about $200K.

 

[Aussiest]

I dont think you can do that.

You can/could borrow via a special Installment loan, to buy property in Super, but these have conditions, including a conservative level of gearing, I dont think negative gearing is permissible.

So you need to stump up about 40% of purchase price.

You would need an accountants advice

Simpler Super is bullsh!t

here is a link for you, plenty similar, google "property investment in super"

http://www.behanlegal.com/Knowledge...nBorrowtobuyRealEstate/tabid/332/Default.aspx

Thanks for the link. Thanks Julia also.

I meant coughing up the 50k myself and treating the property as a 'retirement fund' rather than making payments into a traditional 'super fund'.

If the balance of my repayments after expenses was roughly equal to 9% of my income, couldn't it be a good alternative?

I am self-employed so i have to make my own payments anyway.

 

[jono1887]

well seems like from the fees its not going to be worth it for me. I'm only 18 and my income this year is ~20k mostly from stocks... i was just wondering if there was a way i could minimise the amount of tax i was paying by putting into a super account. I dont really trust those super funds with my money considering most of them lost **** loads of money in the same amount of time where I've made most of mine :
I guess ill just be paying my taxes this year...

 

[Aussiest]

Get an ABN. You're a share trader. Look at the ATO website to see whether your trading meets the criteria of 'income'. I'm pretty sure it would. A good accountant could also do this for you.

As a share trader, you are effectively running a business. A business is made up of revenues and expenses. Your trading gains are your revenue and your expenses are:

Brokerage (both ways)
Margin lending interest
Stock borrowing fees
Internet connection
Computer accessories (hardrives, USB drives etc.)
Depreciation on your computer, laptop etc.
Depreciation on other capital equipment such as mobile phone
Your mobile phone bill
% of utilities (electricity etc.)
% of landline if use ADSL
Trading books / education

Anything you can think of that is related to trading would be tax deductable if you were able to claim it as income.

You won't have to pay tax on the full 20k.

 

[Prospector]

Also, you cant actively 'trade' shares in a Super Fund, as that is carrying on a business which defeats the sole purpose test. Of course you can buy and sell shares, but that has to be in accordance with your investment strategy and Trust deed.

As Julia said, do not underestimate the power of the compliance rules in SMSF's. Ours has been going now for over 10 years, before they became the flavour of the month. Their explosion has meant that the ATO is out to ensure compliance is spot on. I suspect wth the cheapie start up fees that the rules are never really laid out for you in a manner which you can understand - it takes time to do that and time is $.

 

[awg]

Also, you cant actively 'trade' shares in a Super Fund, as that is carrying on a business which defeats the sole purpose test. Of course you can buy and sell shares, but that has to be in accordance with your investment strategy and Trust deed.

I dont agree Prospector.

My advice is that you can, from different SMSF specialists.

But you cannot claim any deductions.

The sole purpose test does not disallow any Investment strategy, so long as the Trust deed permits it, and it is lawful and reasonable.

You can trade CFDs, for instance in my SMSF

 

[lasty]

Is SMSF setup,online portfolio,audit and tax return good value at $2200 pa ?

 

[jono1887]

So why do you have to pay annual fees to self-manage your future?? I dont get it, im going to be the one managing it, yet im paying fees to someone annually

 

[awg]

The fees are for Audit, Preparation of Tax return

These are legal requirements

 

[vincent191]

SMSF can trade shares & options BUT margin lending is prohibited. There are very strict rules regarding SMSF borrowing money. Only recently have the rules changed for SMSF borrowing money to buy property. Check with your accountant.

If you have less than $100k and time poor SMSF is not for you. There is a high cost of compliance and you are required to keep abreast of the rules and keep strict records.

SMSF is NOT for everybody.

 

[Aussiest]

The fees are for Audit, Preparation of Tax return

These are legal requirements

That's why i am seriously considering buying a property.