Self Managed Superannuation (SMSF) for Doctors

The world of superannuation is a constantly evolving legislative environment, and at the more complex end of the spectrum are the rules around self managed superannuation.
The Smart Money section of the weekend Australian Financial Review had some interesting statistics on those who have chosen to establish themselves in a self managed fund. Not surprisingly those aged 34-54 make up the lion’s share of new funds established at 55%, this age bracket are those who have established themselves in their careers and finances and are focused on using superannuation to build their retirement savings.

Interestingly though, 80% of new self managed super members earn less than $100,000 per year.

Choosing to rollover from a retail or industry fund into self managed super is a move that should be considered carefully, for most of our medical clients the additional costs involved are no match for the increased investment options and direct control of this sizeable asset.

In regard to investment options, an overwhelming number of our clients seek the option to utilise some of their superannuation funds to acquire or expand their direct property portfolio. Self managed provides this option and this desire is further enhanced when that direct property might be the doctor’s rooms or other business property.

In the past trustees of self managed funds have pushed the boundaries of the rules by purchasing art and other collectables in the super fund and then displaying those items in their homes or work places. The government has attempted on a number of occasions to address this issue but with limited success. Historically trustees simply put in place ‘arms-length’ rental agreements so the fund was not out of pocket by providing these items for the use of the members.

However the rules have changed as of the 1st July 2011 which will make the regulation of this issue much more transparent.

Simply put, from the 1st of July there can be no use by a member of a collectable item, each item must be insured within 7 days of acquisition, noted in the minutes where the item will be stored. For the trustees this is a matter of strict liability, which means there does not need to be any intent, recklessness, negligence or knowledge of the issue required to be at fault. Fines will apply to breaches etc.

As more money flows into self managed superannuation the rules and regulation relating to the activities of the trustees will continue to evolve, and as can be seen from the 1st July changes we are heading towards a zero tolerance style of regulation.

Establishing a self managed super fund requires comprehensive advice to ensure you understand the responsibility you take on as trustee and the strategic advantages self managed superannuation can bring to your financial affairs.

MEDIQ can assist you in considering the option of self managed superannuation, please contact us to arrange an appointment.