SMSF and Their Advantages
SMSF and their advantages
Operating a SMSF has many advantages. Some of them are mentioned below:
Cost Investors who have large super account balance; for them a Self managed super fund can be cheaper than other super alternatives. Normally this is because a greater part of the operating cost of a SMSF is fixed whereas retail super fund charges a proportion of assets that is under the management.
Control Trustees or members of SMSF take the decisions regarding the investment on behalf of the fund. This means that the members of super fund have total control on how the assets of the fund are invested.
Flexibility – Trustees or members of a SMSF can invest the super fund directly in an extensive range of assets as compared to those usually available through retail super fund. Decisions regarding investments and modifications to the structure of the Fund can also be swiftly executed.
Tax Concessions A SMSF get the benefit of tax reductions which makes it a potent wealth formation plan. The tax concession rate of 15% applies to the funds income like payments on which the tax payer gets a tax deduction. Realized capital returns on investments kept for over 12 months are taxed at the effective rate of 10%. Tax on a SMSF can be reduced by using franking credits and the compensating of capital losses
