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Understanding Self-Managed Super Fund Trustees

Understanding Self-Managed Super Fund Trustees

A Self-Managed Superannuation Fund (SMSF) is a type of “trust” and like any trust must be run by trustee/s. However, before setting up it is important to understand the SMSF trustee structure and rules.

Who is a Trustee

A SMSF trustee is responsible for running the fund and making decisions that affect the retirement interests of each fund member. The Trustees are responsible for administering the SMSF duties including:

  • Establishing the Investment Strategy
  • Complying with all Super Laws
  • Maintaining all records of the SMSF
  • Lodging Tax and Regulatory Returns

Trustee Options

There are two SMSF trustee structure options available, one where the trustees work in their individual capacity and the second where a company is appointed as the trustee. Each option is detailed below.

In both cases, the members run the fund and as a general rule, all members are either trustees themselves or directors of the corporate trustee.

  1. Individuals as trustees: In this case, trustees who are individual people (as the name suggests) manage the fund and each trustee is a member. It is important to note that where an SMSF has individual Trustees, it is a legislative requirement to have a minimum of two Individual Trustees. In the case of a sole member fund, the member would need to appoint an additional person to act with them as joint trustees.
  2. A company as corporate trustee: In this option, if you have an existing established company you can nominate this Company to be the Trustee of the SMSF. If not, you can establish a company for a “special purpose”, where the sole purpose of the company is to act as Trustee for an SMSF.

Generally, all of the members will need to be directors of the trustee company. In the case of a sole member fund, that member can be the sole director of the trustee company

Trustee Rules & Exceptions

SMSF trustee rules state that:

  • Trustees (or trustee directors) cannot generally be in an employee/employer relationship (unless they are related)
  • Trustees cannot be paid by the fund for carrying out their trustee duties. However, they could be paid for professional services supplied such as bookkeeping, legal or taxation services.
  • Trustees need to be Australian residents as the place of central management and control of a SMSF must always be in Australia
  • All trustees must sign a declaration acknowledging their roles and responsibilities.
  • People acting as trustees must not be “disqualified persons” – for example, those who have been convicted of an offence involving dishonesty or who are undischarged bankrupts.

In a Self-Managed Superannuation Fund, all members of the fund must be trustees and all trustees must be members. However, some exceptions to this rule are:

  1. Where a member is under 18 years of age – they will require a representative to act as a trustee on their behalf
  2. Where a member loses capacity – they will also require a representative to act for them
  3. In the case of a single member fund – where the trustee is not a company, they will require an additional person to act with them as trustees
Individual or Corporate Trustee: making the right choice

Statistics from the Australian Taxation Office indicate that as of 30 June 2017, the majority (58.6%)

of all SMSF’s had a corporate trustee.

The current “best practice” recommendation from most professionals in the industry is to use a trustee company and it is evident that more than 80% of newly established funds have a corporate trustee. The reasons for this are varied but include:

  1. Sole member funds. Single-member funds with a corporate trustee can have a sole director and no additional trustees are required. As the sole Director and Shareholder of the Company, this gives one total control of the SMSF.
  2. Administration simplicity. Members can move in and out of a fund through death, marriage, divorce, etc. Where this occurs when the trustees are individuals, the fund will be required to change all of the ownership details of its assets and investments and this can be a daunting and time-consuming task.

    On the other hand, changing the directors of a trustee company is very simple and no other changes are required to assets or investments

  3. Continuity when members change. Unlike other types of trusts which have a limited life (80 years) due to the “rule against perpetuities”, a superannuation fund is exempt from this and can last for multiple generations. A company lasts until it is wound up or deregistered.
  4. Concessional tax guarantee. The rules for SMSF’s provide that where the fund has individual trustees, its sole or primary purpose must be to pay old-age pensions. Where funds have both member pension accounts and accumulation accounts this could be brought into question.

    This may become more significant with the latest round of changes to superannuation law which limit the total amounts that can be held in pension accounts and may result in some cases where accumulation accounts are held long term. Having a company as a trustee will avoid these uncertainties.

  5. Asset protection. In the case of a fund being sued, individual trustees could potentially be liable but this would not normally be the case for directors of a trustee company.

  6. Borrowing. It is easier for an SMSF with a corporate trustee to borrow (via a limited recourse borrowing arrangement) as often lenders will insist that an SMSF has a corporate trustee.
  7. Reduced penalties. In the event that any super laws are breached, the ATO levies administrative penalties on each trustee per violation. If the fund has a corporate trustee and the trustee is charged a penalty, it is only charged one penalty amount and the directors of the corporate trustee are jointly liable to pay that penalty.

    However, where a fund has individual trustees a penalty would be imposed on each individual trustee. For example, if the fund has four members the penalty is four times that of the penalty imposed on a corporate trustee for the same superannuation law infringement.

It is also generally recommended that the trustee of a SMSF should be a “special purpose superannuation trustee company”. This means that the company only acts in that single capacity and does not operate a business or act as trustee of another trust (these conditions are set out in the company’s constitution). The advantages of this approach include that there is no possible confusion over the separation/ownership of superannuation fund assets and the annual ASIC filing fees are only around 20% of the usual fee.

The additional one-off set up costs for a company trustee will generally be less than $1,000 (with annual filing fees of less than $50) but this represents good value in light of the advantages outlined above.

The information provided in this article is general in nature and does not take into account your personal circumstances, needs, objectives or financial situation. This information does not constitute financial or taxation advice. Before acting on any information in this article, you should consider its appropriateness in relation to your personal situation and seek advice from an appropriately qualified and licensed professional.

BOB LOCKE – CHARTERED ACCOUNTANT & SMSF SPECIALIST

Mr Locke has been an accountant and taxation expert for 35 years. His company, Practical Systems Super, provides an all-in-one SMSF solution with a full administrative service, SMSF management software, and independent, licensed advice, tailoring their package to meet the individual needs of trustees and SMSF professionals.

To find out more about Practical Systems Super, visit www.pssuper.com.au, or call 1800 951 855.

New opportunities for employees to claim additional superannuation

personal deductible contribution

Under the current rules, the maximum amount of “concessional” superannuation contributions that
can be claimed is $25,000.00 per person per annum. This is referred to as the “Concessional
Contributions Cap”. Concessional contributions refer to those contributions that are claimed as a tax
deduction by the person or entity paying the contribution. They include employer contributions,
salary sacrifice contributions and personal deductible contributions.

Up until 30th June 2017, the so called “10% rule” applied where you could only claim personal
contributions if you income from employment was less than 10% of your total income. Note that
the definition of “income” included “assessable fringe benefits” and “reportable superannuation
contributions”.

This restriction meant that many employed individuals could not make deductible personal
contributions to reduce their taxable incomes and the only way to maximize their total concessional
contributions cap was to make arrangements with their employer for a salary sacrifice arrangement
where they would reduce their gross salary in favour of the employer making a larger contribution
(above the normal 9.5% of salary) to the employees super fund. These salary sacrifice arrangements
are still available and continue to provide the same benefits, an employee may not always be able
to make such arrangements with their particular employee. Salary sacrifice arrangements can only
be made prospectively, which means that if say the employee wanted to make a lump sum
contribution near the end of the financial year, this would not be possible.

With the changes applying from 1 July 2017, employees can now make additional personal
contributions and claim a tax deduction for the additional contributions, thus putting them on the
same footing as self-employed people. The additional flexibility of this system may be helpful in
several different scenarios. Take the following for example

  • Mary is working as a specialist teacher earning say $110,000
  •  She has had an investment property in a capital city for many years and decides to sell the
    property to re-arrange her investments in preparation for planned retirement in a few years
  • She is shocked to find out from her accountant that based on the estimated sale price,
    there will be a taxable capital gain of $100,000 on the sale of the property which will cost
    her almost $45,000 in additional tax.
  • Mary is able to make an additional contribution to superannuation of $14,500 and as a
    result reduces her tax bill by around $7,000
  • Although Mary’s super fund will have to pay tax of $2,175 on the additional contribution,
    she is still almost $5,000 better off.

Or take the case of Joe who is employed as a builder and earns $60,000 pa. In May, Joe receives a
bequest of $25,000 from the estate of a recently deceased relative. He would like to retain around
$6,000 of the money to take the family on a holiday trip and save the balance of $19,000. After
talking to his financial adviser, Joe decides to contribute the full $25,000 to his existing
superannuation fund; $19,000 is claimed as a concessional contribution and $6,000 as a nonconcessional
contribution. As a result of claiming the additional contribution, Joe receives an
additional tax refund of $6,800, which he uses for the family holiday. After allowing for the
additional tax in the super fund on the concessional contribution of $2,850 (i.e. 15% of $19,000),
Joe has increased his net savings by $3,150 and also has an additional $800 spending money for the
holiday!

Note that people who are 65 or older, are still required to meet the “work test” in order to claim
concessional contributions although this is not normally an issue for people with a significant part of
their income coming from wages.

Note also that just like salary sacrifice superannuation contributions, Centrelink add back any
personal concessional contributions claimed when assessing entitlements that are subject to the
“income test”.

BOB LOCKE – CHARTERED ACCOUNTANT & SMSF SPECIALIST
Bob’s career spans more than 40 years in accounting, taxation and financial services. His specialty is self-managed superannuation funds and the development and management of financial accounting software.
Bob has experience as a partner in a large accounting firm, as administrator of a large corporate
superannuation fund with more than 1000 members and as owner/founder of Practical Systems.

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The information provided in this article is general in nature and does not take into account your personal circumstances, needs, objectives or financial situation. This information does not constitute financial advice. Before acting on any information in this article, you should consider its appropriateness in relation to your personal situation and seek advice from an appropriately qualified and licensed professional.

Make the most of your super with a personal deductible contribution

personal deductible contribution

Would you like more flexibility with your superannuation but don’t have the option to salary sacrifice? You can now claim a tax deduction on your personal contributions. SMSF expert Bob Locke explains.

How much can you contribute?
Under the current rules, the maximum amount of “concessional” superannuation contributions that can be claimed as a tax deduction is $25,000.00 per person per annum. This is referred to as the “Concessional Contributions Cap”. This amount includes any super contributions paid by your employer; salary sacrifice contributions plus any other tax-deductible personal contributions you make to your super account.

On the other hand a “non-concessional” contribution is a payment made to superannuation after tax. It can be from a range of sources such as an inheritance, additional payment from your after-tax salary, property sale etc. The usual cap on non-concessional contributions is $100,000 per financial year.

Salary sacrifice vs Personal Contributions
Until 30 June 2017, only the self-employed, retirees or those who earned less than 10% of their income as an employee, could claim a tax deduction on a personal contribution.

This restriction meant that many employed individuals could not make deductible personal contributions to reduce their taxable incomes. The only way to maximize their total concessional contributions cap was to make arrangements with their employer for a salary sacrifice arrangement where they would reduce their gross salary in favour of the employer making a larger contribution (above the normal 9.5% of salary) to the employee’s super fund.

Now there’s an opportunity to give your super investment a boost and reduce your tax bill at the same time. With the changes effective from 1 July 2017, employees can make additional personal contributions and claim a tax deduction for the additional contributions, thus putting them on the same footing as self-employed people.

But how is that different from a salary sacrifice arrangement you may ask. Though salary sacrifice arrangements provide the same benefits one may not always be able to make such arrangements with their employer.

Compared to regular salary sacrifice contributions which can only be made prospectively a personal deductible contribution means you can make one lump sum contribution towards the end of the financial year. The additional flexibility of this system may be helpful in several different scenarios.

Take Mary’s case for instance. Mary works as a specialist teacher earning $110,000 annually. She has had an investment property for many years that she decides to sell in preparation for her impending planned retirement. On speaking to her accountant Mary finds out that based on the estimated sale price, there will be a taxable capital gain of $100,000 on the sale of the property which will cost her almost $45,000 in additional tax. She decides to make an additional contribution to superannuation of $14,500 and as a result, reduces her tax bill by around $7,000. Although Mary’s super fund will have to pay tax of $2,175 (15% of 14,500) on the additional contribution, she is still almost $5,000 better off.

Or take the case of Joe who is employed as a builder and earns $60,000 pa. In May, Joe receives a bequest of $25,000 from the estate of a recently deceased relative. He would like to retain around $6,000 of the money to take the family on a holiday trip and save the balance of $19,000. After talking to his financial adviser, Joe decides to contribute the full $25,000 to his existing superannuation fund; $19,000 is claimed as a concessional contribution and $6,000 as a non-concessional contribution.

As a result of claiming the additional contribution, Joe receives an additional tax refund of $6,800, which he uses for the family holiday. After allowing for the additional tax in the super fund on the concessional contribution of $2,850 (i.e. 15% of $19,000), Joe has increased his net savings by $3,150 and also has an additional $800 spending money for the holiday!

Super contributions over 65

Turning 65 years of age is a life milestone, but unfortunately, it does make putting money into your super a bit more difficult.

If you are over 65 you will need to pass the “work test” to continue making contributions – this means you will need to have worked a minimum of 40 hours in any 30-consecutive day period during the financial year.

Also, just like salary sacrifice superannuation contributions, Centrelink adds back any personal concessional contributions claimed when assessing entitlements that are subject to the “income test”.

Note that this age limit it propsed to increased to 67 from 01/07/2020.

Making extra contributions to your super

If you would like to make extra contributions to your superannuation, you can do it using either
‘before-tax’ or ‘after-tax’ money, keeping in mind that there are annual limits (caps) on how much
you can contribute to superannuation.

Consider your financial situation and decide whether making extra super contributions is right for you across the short and long term.


The information provided in this article is general in nature and does not take into account your personal circumstances, needs, objectives or financial situation. This information does not constitute financial or taxation advice. Before acting on any information in this article, you should consider its appropriateness in relation to your personal situation and seek advice from an appropriately qualified and licensed professional.


BOB LOCKE – CHARTERED ACCOUNTANT & SMSF SPECIALIST
Mr Locke has been an accountant and taxation expert for 35 years. His company, Practical Systems Super, provides an all-in-one SMSF solution with a full administrative service, SMSF management software, and independent, licensed advice, tailoring their package to meet the individual needs of trustees and SMSF professionals.
To find out more about Practical Systems Super, visit www.pssuper.com.au, or call 1800 951 855.

What is Salary Sacrifice and is it still relevant?

What is Salary Sacrifice and is it still relevant?

Under the current rules, the maximum amount of “concessional” superannuation contributions that can be claimed by an individual is $25,000.00 per annum. This is referred to as the “Concessional Contributions Cap”. Concessional contributions refer to those contributions that are claimable as a tax deduction by the person or entity paying the contribution. They include employer contributions, salary sacrifice contributions and personal deductible contributions.


A salary sacrifice arrangement is where an employee agrees with their employer to reduce their gross salary in return for the employer making a larger contribution (above the normal 9.5% of salary) to the employee’s superannuation fund. The benefit that arises is due to the difference in tax rates between that of a superannuation fund (which is 15%) and the marginal tax rate of the employee which is usually much higher. The following table illustrates the benefit from a typical salary sacrifice arrangement.

Note that in this example, the take home pay is reduced by $9,403 but the amount in the employees super fund has increased by an additional $13,175, an overall increase in after tax income/savings of $3,772 or 4.6%.

One of the obvious downsides of salary sacrificing is the reduction in take home pay. These arrangements are also “prospective” in that they must be put in place only in relation to future earnings and can’t be used to make lump sum contribution amounts out of past earnings such as accrued leave entitlements.

Up until 30th June 2017, the so called “10% rule” applied where you could only claim personal contributions if your income from employment was less than 10% of your total income. This restriction meant that for many employed individuals, the only way to make deductible personal contributions to reduce their taxable incomes was via a salary sacrifice arrangement. With the changes applying from 1/7/2017, employees can now make additional personal contributions to their superannuation fund at any time during the year and this can be an alternative (or supplement) to salary sacrificing. The important thing is to remember that total concessional contributions should not exceed the cap of $25,000 and this cap includes; superannuation guarantee contributions by the employer, salary sacrifice contributions and personal deductible contributions.

Bob Locke – Chartered Accountant & SMSF Specialist

The information provided in this article is general in nature and does not take into account your personal circumstances, needs, objectives or financial situation. This information does not constitute financial advice. Before acting on any information in this article, you should consider its appropriateness in relation to your personal situation and seek advice from an appropriately qualified and licensed professional.

New England Self-Managed Super Fund Information Day

Featuring experts from SMSF Association, Stewart Partners, Moin Morris Schaefer and Practical Systems Super, the New England SMSF Information Day is an event for SMSF Accountants, Advisers and Trustees and will focus on developing your technical knowledge, practical skills and know-how in managing an SMSF.

Kim Collins, Tamworth

“I have been a Chartered Accountant for approximately 38 years, 28 of those being as a Principal or Partner in Accountancy Practices.

I have known Bob for 30 of those years in his position as a Chartered Accountant also.

I commenced my first Self Managed Superannuation Fund in June 1984.

When Superannuation Fund Regulations required Self Managed Superannuation Funds to be audited, Bob was appointed as auditor of my Funds.

Over the period that Bob has been auditor of my Self Managed Superannuation Funds I have not only received a Professional Service from him as an auditor but also proactive advice in respect of my role as a Director of the Corporate Trustees of the funds. As a result I have no hesitation in contacting Bob in respect of any query that I may have in respect of Self Managed Superannuation and as such would have no hesitation in recommending Bob as a Self Managed Superannuation Specialist.”

SMSF Association Technical Day Series

Challenge your understanding of the rules which shape your SMSF advice with case-study based, interactive workshops followed by comprehensive technical sessions. 

You’ll be introduced to topics of increasing importance in the overall framework of advice, ensuring the best interests of your SMSF clients. Hear the latest developments in SMSF legislation, regulation and interpretation of complex theories and strategies.

Practical Systems Super is proud to be the official SMSF Association conference partner at the Brisbane and Sydney events this year. We will have staff available to talk to you about all of your SMSF administration and software requirements for your business.

Date:

23 Jul 2019
8:00 am AEST – 6:00 pm AEST

Venue:

Mercure Hotel Brisbane
85-87 North Quay
Brisbane, QLD 4000

CPD Points:

7.25

Date:

1 Aug 2019
8:00 am AEST – 6:00 pm AEST

Venue:

Building 10
Level 7/235 Jones St
Sydney, NSW 2007

CPD Points:

7.25

Beyond the contribution caps

Most professionals are aware of the general limits or “caps” on superannuation contributions. Despite there being no laws preventing fund members from making unlimited contributions, most understand that there can be significant financial consequences associated with exceeding those caps. It is important to remember that there are specific measures which allow for contributions beyond the usual maximum amounts permitted. These can present important planning opportunities which may otherwise be overlooked.

The general contribution caps

There are defined annual caps or maximum amounts that are prescribed for the various types of superannuation contributions. The applicable caps for the two major contribution types are:

  • Concessional contributions – $25,000 per annum. These include employer contributions, salary sacrifice and personal contributions claimed as a deduction.
  • Non-concessional contributions – $100,000 per annum and only available if the Total Superannuation Balance of the member is below $1.6 Million.

Consequences of exceeding the contribution caps

It is not possible to simply withdraw excess contributions from the fund (even if they were made by mistake) and the individual concerned will need to wait until the Australian Taxation Office issues a determination notice. Briefly, the consequences of exceeding the contribution caps can be summarised as follows:

  • Excess concessional contributions – the excess contributions will be taxed at the members’ marginal tax rate and there is generally an additional charge which is effectively interest on the additional tax payable. Up to 85% of the excess contributions can be withdrawn from the fund and any excess amounts not withdrawn will be treated as non-concessional contributions with possible flow-on effects from excess non-concessional contributions.
  • Excess non-concessional contributions – there are basically two options here; (a) elect to withdraw the excess in which case 85% of the associated earnings on the excess amount will be added to the member’s personal taxable income and taxed at their marginal rate of tax, or (b) elect not to release the excess and have the full amount of the excess taxed in the fund at the highest marginal tax rate of 47%.

Measures which allow contributions beyond the general caps

It is clear that making excess contributions will generally lead to a situation of paying additional tax and produce an overall negative financial outcome for the member concerned. However, there are a number of specific measures which allow for contributions beyond the usual maximums and these can be incorporated into strategies with significant benefits to the member. Here are some examples:

Example 1 – utilising the 5 year catch up provisions for concessional contributions

Fred is employed on a salary of $86,000 pa and has had employer contributions of $8,170 made each year from 1/7/2018. His current total superannuation balance is $250,000. Towards the end of the 2022/23 financial year, Fred sells an investment property and makes a gross capital gain of $200,000. His accountant advises that he will be up for additional tax of around $39,300. 

Fred could consider a concessional contribution to his superannuation fund of up to $84,150 which is the amount of his unused concessional cap since 1/7/2018. This would reduce the additional personal tax to $6,000 and after allowing for the 15% contributions tax on the $84,150 into the fund, Fred’s net saving would be around $20,600.

Example 2 – claiming 2 years concessional contributions using a contribution reserving strategy

Katie is self-employed and for the year ended 30/6/2019 estimates her net business income at $180,000. She has planned for some time to take a “year off” and travel, and has arranged this to commence in the following year and so is unlikely to have any significant income for that year. Katie currently has $750,000 in her Self-Managed Superannuation Fund and is about to sell an investment property which is expected to realise a gross capital gain of $100,000. The additional net capital gain will attract tax of around $23,500.

Katie decides to contribute two amounts of $25,000 to her superannuation fund; one in December 2018 and one in mid-June 2019. The effect of this will be to reduce Katie’s personal tax by $23,500 and after allowing for the 15% contributions tax in the SMSF, her net saving is $16,000 which is double the amount saved if she simply contributed the $25,000 cap amount.

Note that there are several essential elements for this strategy to be effective:

  • The “second” contribution of $25,000 has to be made in June as the SMSF will have to “reserve” this amount for a maximum period of 28 days i.e. when the contribution is received in June, it is allocated to a contributions reserve and then allocated to Katie’s account in the Fund in early July
  • Katie will need to complete a “Request to adjust concessional contributions” form to ensure that the Australian Taxation Office does not treat the additional $25,000 as an excess concessional contribution.
  • Generally, this strategy can only be used by those who have a self-managed superannuation fund.

 

Example 3 – using the CGT contributions limit for proceeds from the sale of a small business and combining with the home “downsizer” contributions and other measures

Rose took over the family farm  25 years ago and having reached the age of 66, decides to sell up and move to the coast to be near family. The farm is sold for $2.5 million and after taking advice, Rose decides to move the maximum amount possible into a newly established self-managed superannuation fund. Settlement of the farm is expected in May and she would like all the financial arrangements to be in place by 30th June.

Rose’s goal of achieving the maximum possible superannuation balance in the specified time frame could be achieved using a combination of available strategies as follows:

  • Make non-concessional contributions of $300,000 utilising the 3 year bring forward option (now available to those aged 65 and 66)
  • Make a CGT contribution up to the maximum allowed for 2018-19 of $1.48 million
  • Make a “downsizer contribution” of $300,000 (in relation to Rose’s home which was part of the farm). Note that these contributions are not treated as non-concessional and are not subject to the usual Total Super Balance Cap
  • Make a concessional contribution of $25,000
  • Make a second concessional contribution of $25,000 (as per example 2)
  • Total amount contributed is therefore $2,130,000
  • Rose then commences a retirement phase pension with a balance of $1.6 million, leaving $530,000 in accumulation phase.

 

Take out point

Even though there are basic defined caps for the main contribution types (as well as the general overriding Total Super Balance Cap of $1.6M restriction), there are specific measures that may suit particular circumstances where additional contribution strategies may be relevant and beneficial. Always consider the particular circumstances of the individual and look beyond the basic contribution caps.

 Bob Locke – CA SMSF Specialist – CEO of Practical Systems Super

The information and examples provided in this article are general in nature and do not take into account personal circumstances, needs, objectives or financial situation. This information does not constitute financial or taxation advice. Before acting on any information in this article, the reader should consider its appropriateness in relation to their personal situation and seek advice from an appropriately qualified and licensed professional.

Software firm launches new SMSF administration service

By Miranda Brownlee | SMSF Adviser |
 
An accounting software firm has developed a new SMSF administration service aimed at accountants and financial advisers.

The new administration service, Practical Systems Super, has been developed by Armidale based software firm Practical systems, which has been offering specialised accounting and management software for small business and agribusiness clients since 1992.

Practical Systems chief financial officer Bob Locke said he decided to launch the new service in order to reduce the administration and compliance burden of SMSFs for financial professionals and trustees alike.

Over his 35 years of working as an accountant and taxation expert, Mr Locke said he has watched the increasing complexity in the administration and compliance of SMSFs in the face of ever-changing government regulation.

“From my previous experience with software development, it was clear that a good software platform would go a long way towards making the task much more efficient,” Mr Locke said.

“The cloud-based system allows all SMSF records and documents to be kept in the one easily-accessed location facilitating the sharing of information between stakeholders, such as accountants, auditors, advisers, and clients.”

Mr Locke said he expected an increase in the number of SMSFs being implemented by family and farming businesses.

“There are around 600,000 SMSFs in Australia and this number is steadily growing,” Mr Locke said.

“There is significant potential for rural and regional businesses to utilise self-managed superannuation. Often these businesses are family owned and SMSFs can be a great way to accumulate off-farm or non-business assets, thereby greatly assist with the succession process.

The use of SMSFs can allow family farms or businesses to be passed onto the next generation without the need for the sale of assets or the younger generation to take on debt to support the retirement of the previous generation, he said.

Currently, Practical Systems Super’s services are available to accountants and advisers.

The company plans to expand to software-only offerings in the next year and the platform is to be flexible in the face of future superannuation changes.

“Practical Systems Super sees opportunities to meet the needs of smaller accounting firms and financial advisers, as well as supporting individual trustees directly,” said Mr Locke.