Securing Your Self Managed Super

Posted on 03 January 2012

Self Managed Super Funds (SMSFs) are becoming increasingly popular as more and more people become disenchanted with the performance of their retail super funds. This has been aided by the federal government supporting a growth in SMSFs in recent years by enabling SMSFs to borrow to acquire certain assets. Of course of all of this has been in an attempt to fund our aging population and move them away from reliance on social welfare payments in their retirement.

With the change in the rules of SMSFs being able to borrow funds to invest there has been a rapid growth in SMSFs buying real estate. An important tip that we often see people overlook is to ensure that there is proper verification of the ownership of the assets by the SMSF. In NSW it is not possible to register a property in the name of a trust – it must be in the name of the trustee. Accordingly to ensure that your SMSF is compliant and can properly establish its ownership of the assets.

The most prudent way to achieve this with property is to have the SMSF lodge a caveat over the property and/or have a declaration of trust document executed regarding the specific property. This can sometimes be overlooked when acquiring the property and can cause significant problems (including taxation consequences) for the SMSF if it is not done.

Anyone who is considering or has a SMSF should ensure that they are receiving appropriate legal, financial and taxation advice about the set up and management of their SMSFs. If you are thinking about an SMSF or already have one and would like some assistance with it please contact us