Self Managed Super

[lasty]

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

In your super fund?

 

[lasty]

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.


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.

"there are the budget organisations like E-Super"

Are they budget?
My understanding is that they are taking trail commissions on everything so the infact the product can work out more expensive.
They are meant to disclose this.
Can anyone confirm using Esuper that these trailing fees have been disclosed?
If so, how much are they?
There is nothing on their website. Do they have a FSG?

 

[awg]

"there are the budget organisations like E-Super"

Are they budget?
My understanding is that they are taking trail commissions on everything so the infact the product can work out more expensive.
They are meant to disclose this.
Can anyone confirm using Esuper that these trailing fees have been disclosed?
If so, how much are they?
There is nothing on their website. Do they have a FSG?

dont believe they take trail coms on MINS, but dont have any in my SMSF.

ring them, they will call you back.

or email them with your detailed questions and they will email you back.

if you want to have MINs in your SMSF you will get peeled for fees by the MINs way way more anyway

that why I use equities, CFDs and cash

MINs are clunky

 

[lasty]

dont believe they take trail coms on MINS, but dont have any in my SMSF.

ring them, they will call you back.

or email them with your detailed questions and they will email you back.

if you want to have MINs in your SMSF you will get peeled for fees by the MINs way way more anyway

that why I use equities, CFDs and cash

MINs are clunky

"that why I use equities, CFDs and cash"


They will be taking a clip on each of those and that should be disclosed.
They are licensed through an AFSL holder and thats the way they can only get remunerated which is why they have to disclose all fees and commissions.

 

[awg]

"that why I use equities, CFDs and cash"


They will be taking a clip on each of those and that should be disclosed.
They are licensed through an AFSL holder and thats the way they can only get remunerated which is why they have to disclose all fees and commissions.

you are correct.

they get a % of the brokerage via their commercial arrangement with the brokers etc...

but as a for instance, I get the lowest rates on all commsec trades over 10k, under that, not as good.

I think you will find that is disclosed.

I dont know how deep you have dug, and your level of expertise.

It may be possible that ultimately, you could do it cheaper via an accountant, but it would depend on how much you trade, the level of assets.

You could then do your calcs based on how many trades, etc etc.

It sounds like you are really doing your research, which is great.

because once you have started it is a pita to change

I dont think you can use IB brokers for SMSF (could be wrong tho)

It would be great if lower cost brokers could be used, but you may find it harder than you think...for instance IG Markets will not do SMSF

Please keep us updated.

One more thing Super regs are far more complex than most people realise, and having an expert personal accountant, who is a SMSF specialist, would be a wise move IMO.

My personal accountant is, but he would charge me $1200 setup, and audit depends on HOW MANY trades, but at least $3500pa

 

[Aussiest]

In your super fund?

I am self-employed and it is not compulsory to have a super fund. The property wouldn't be in my super fund, it would be part of my 'retirement fund'.

 

[awg]

I am self-employed and it is not compulsory to have a super fund. The property wouldn't be in my super fund, it would be part of my 'retirement fund'.

So why are your questions in this thread ?

 

[Aussiest]

The title of the thread is 'self managed super'. Thought perhaps that 'retirement fund' and 'super' were in effect the same thing, which in effect they are (aren't they? > both saving for retirement). I guess just hashing it out 'out loud'.

I wasn't aware of all the rules and regulations surrounding SMSFs. People generally post because they need to know something or they have knowledge to impart.

 

[awg]

The title of the thread is 'self managed super'. Thought perhaps that 'retirement fund' and 'super' were in effect the same thing, which they are in essence aren't they? Seeing as they are both aimed at saving for retirement.

No.

Superannuation is a tax beneficial environment governed by specific laws and regulations.

A "retirement fund" as you call it does not have those tax advantages, (or regulations and restrictions.)

I have always had a retirement plan that constitutes assets held within super and others outside, such as property acquired in my own and partners name.

I dont want to seem to condescending but if you are asking these questions, you are showing that you are either very young, and/or have no knowledge whatsoever about super.

You need to do some private research, huge resources available, check the ATO website.

The reason I have most of my assets in super is that my tax rate on that income is reduced from over 30% to approx 4%....which makes a huge dif in return, over the years.

 

[Aussiest]

I dont want to seem to condescending but if you are asking these questions, you are showing that you are either very young, and/or have no knowledge whatsoever about super.

...

The reason I have most of my assets in super is that my tax rate on that income is reduced from over 30% to approx 4%....which makes a huge dif in return, over the years.

I'm not that young, i am a little naive when it comes to super though.

So, you're saying that the contributions that you make to super from your pre-tax income are only taxed at 4% rather than the usual 30%+? That's pretty good.

I'll have to work out what i'm doing. One house won't be enough, lol.

But, thanks for your resources, will check them all out when i have time

 

[awg]

I'm not that young, i am a little naive when it comes to super though.

So, you're saying that the contributions that you make to super from your pre-tax income are only taxed at 4% rather than the usual 30%+? That's pretty good.

I'll have to work out what i'm doing. One house won't be enough, lol.

But, thanks for your resources, will check them all out when i have time

My tax rate is because I draw a pension from Super fund.

If that income was derived from non-super assets, I would pay the full marginal tax rate, in my case 30%+

Due to the fact that super PENSION income is concessionaly taxed, after rebate, and deductible amount, in my case effective income tax rate is 4%.
( and no CGT )

If I was over 60, it would be 0%.

You CANNOT draw a pension, unless you have met a condition of release.

With regard to self-employed, there is concessions available..check the ATO website, ring them, and talk to yr accountant.

When I endeavour to answer questions re Super, I find that I need to know how old the person is to give a sensible answer

 

[ChilliBlue]

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.

You cannot reside in any property that is in the super fund

 

[sinic]

Hi AWG,

I think I might be in a similar position to you - and up to about 3 months ago I have been "trading" in my super fund (in pension mode) - so no tax.

However, as an experiment I opened a IB account outside the fund - because that can be mildly leveraged - and even if you do exactly the same thing - you make double the profit so even if you pay 30% tax you are still ahead of the no-tax super deal.

But it is even better than that because you can do whatever you want - not worrying about whether the tax man is going to say whether you are trading or investing. There seems to be a fine undefined line where they might complain about certain short term strategies.

Anyway my experiment shows better net reurns outside which is a bit of a bummer actually since I like the notion of zero tax.

Cheers,

 

[awg]

Hi AWG,

I think I might be in a similar position to you - and up to about 3 months ago I have been "trading" in my super fund (in pension mode) - so no tax.

However, as an experiment I opened a IB account outside the fund - because that can be mildly leveraged - and even if you do exactly the same thing - you make double the profit so even if you pay 30% tax you are still ahead of the no-tax super deal.

But it is even better than that because you can do whatever you want - not worrying about whether the tax man is going to say whether you are trading or investing. There seems to be a fine undefined line where they might complain about certain short term strategies.

Anyway my experiment shows better net reurns outside which is a bit of a bummer actually since I like the notion of zero tax.

Cheers,

Hi sinic,

I'm glad to finally find someone else who is "trading" in Pension mode.

can you not open a CFD account within your Superfund?

My deeds permit this.

I also have a GFT CFD account outside my super as well, as they have a good free permanent demo account, so you can continue to practice and refine strategies.

No CGT is the long-term benefit in super pension.

I may start a separate thread for Super Pension Strategies, to see if there are other ASFers doing things like this.

One needs to be fairly cautious not to take positions that may result in "blow ups" especially if a substantial % of ones income is derived from the pension.

I have clarified to my satisfaction that at this time the ATO does not consider trading in SMSF to be a business.

I will have done only about 300 trades this fin yr anyway.

I dont really want to do much more than that, (at least until my skills are more fully developed)

The ATO have audited cases of over 1000 trades pa, according to my administrator, with no issues.

My situation has added complexities that I wont go into, but it does concern me that the Govt keep changing rules.

I NEVER agreed that 0% for over 60s was fair or sensible...it should be capped IMO

I know of several people with multi-millions in their super...and they pay NO income tax.

One guy has $30 million

 

[lasty]

Do you think there are many "professionals" who actively trade their super?

I know that brokerage would be important but what about the reporting.
Some reporting systems are daily
Others can be weekly, monthly or in some case the low cost models are yearly.
What would be a happy medium?

 

[awg]

Do you think there are many "professionals" who actively trade their super?

I know that brokerage would be important but what about the reporting.
Some reporting systems are daily
Others can be weekly, monthly or in some case the low cost models are yearly.
What would be a happy medium?

I am a bit confused about your reporting systems questions.

In my case I can tell you the value of my portfolio live online, as of this second.

But not all on one integrated platform.

I have to look up the values on the platform of the INVESTMENT provider, not the SMSF admin, so open 3 screens instead of one.

If you choose an integrated SMSF platform, I had a close look at an independant SMSF provider. I think it was fully live, but your MINs are always a few days behind anyway. ( he was great, but a bit too expensive)

What platform does your $2200 provider offer, if you dont mind me asking.

The more details you provide, the better the answers you will get

It takes a LOT of money to develop a fully integrated on-line system, as I understand it.

someone has to pay

As to yr q about "professionals"...if you mean persons employed in the finance/investment area, the ones I have asked are to busy working to trade.

If you mean professional investors, I would like to know as well

 

[lasty]

Ok
The platform offering is unlimited trade reporting valued on daily basis.
All the other investments such as property,MINs are valued when available.
It includes setup,audit, tax return completed and lodged and bas statements etc as well as the full admin stuff.

The professionals im talking about are the ones who actively trade their SMSF or personal accounts.
They might not be looking for a daily update (valuation) in their super account. A weekly or monthly one will be suffice.
They just want cheaper brokerage.


I would have thought many on this forum would be fairly active players.

 

[sinic]

AWG,

I do about 500 trades a year mostly shares but some cfds - The cfds are done so that I am not leveraging or exposing the super fund to more exposure than could be done outright with shares anyway under the trust deed. (The ATO has a ruling on when and how a super fund can use cfds).
My records are all automated within excel and the auditor checks it off versus chess/contract notes and charges me about $1500.

I am not interested in long term cap gains - and it would be interesting to see the ATO challenge a super fund using short term tactics instead of losing heaps on "traditional buy and hold and collect dividends" strategy. Afterall the prime purpose is to provide income for retirement - the investment strategy only has to state how this is going to be implemented.

Cheers,

 

[awg]

Ok
The platform offering is unlimited trade reporting valued on daily basis.
All the other investments such as property,MINs are valued when available.
It includes setup,audit, tax return completed and lodged and bas statements etc as well as the full admin stuff.

The professionals im talking about are the ones who actively trade their SMSF or personal accounts.
They might not be looking for a daily update (valuation) in their super account. A weekly or monthly one will be suffice.
They just want cheaper brokerage.


I would have thought many on this forum would be fairly active players.

Hi again Lasty,

The platform I looked at, the way it worked was, the trades went via UBS, (I'm fairly sure)...cost was way more than commsec even

You had to ring the SMSF admin, and place the order by phone.

totally unsatisfactory for intra-day trades. ( I did over 80 of them this fin yr).

And they charged a % commission on yr total balance

I will be astonished if you can find someone that will let you use any broker of yr choice, the reason being, how will they integrate the information/data into their platform?...you are talking SERIOUS computer software..big $$

As you can tell from my posts, I would like to flush out some who are, as well..I have PM chat with 2 fellows with serious $ who was a sophisticated traders in SMSF, a while back tho

So there is at least 4 of us.

there are others on this forum that trade their SMSF from what they indicate, but not in Pension mode.

In the past, I have found most people with a lot of money, usually are fairly reticent to discuss things fully, especially on a public forum,( even given the cloak of anonymity.)

I am also of the view the vast majority of active participants on this board are under 55.

Big question for you...does the mob u r considering give fin or accounting advice thrown in as well, inclusive?

I did a fairly exhaustive search.

I eventually found a pay by the hour guy as well.. $250 p/h.

 

[Ben L]

Hi, can I set up a SMSF to purchase a business, and also be employed by the business and be paid? Thanks.