Self-managed superannuation funds (SMSFs) have only been a superannuation option for 18 years and what an amazing ride they have had. About 470,000 funds hold in excess of $416 billion in investments, with an average fund size of around $900,000. In 2012 financial year 36,270 SMSF were established, that is over 3000 funds more than the previous year.
If you had established a fund 18 years ago, you would have been able to earn high growth with shares until 2007. Furthermore you would pay no tax on lump sums or pensions paid from the fund if you were now 60 years old or older, all the while being able to control which investments your money was in.
One of the key drivers to establish an SMSF is the ability to choose investments. This includes ASX-listed shares and real estate. As at March 2012 there were $154.4 billion in ASX-listed investments held through SMSFs. As at June 2012 the market capitalisation of ASX was $1,261 billion, SMSFs controlled then 12.2 per cent of the Australian sharemarket.
SMSF’s have many rules and regulations and do not suit everybody with money in super. Biztax does not recommend that any person set up a fund without proper advice from a qualified professional. Call us on 02 6622 5877 to discuss your options!