SMSF IS EASY

CLIENTS

www.smsfiseasy.com People are interested in managing their own super fund with the goal of better returns. This service will help you achieve your goal by setting up a Self-Managed Super Fund. Our team is in place to guide you through these steps to make it as easy as possible, by completing the setup, administration and compliance that you will need in order to have your own Superannuation fund. Taking a step towards your own SMSF is simple; you can speak to your Credit Advisor, Accountant, Builder or Real Estate Professional and ask them how they can help you apply for a loan. In the meantime we set setup your SMSF, in readiness for your first investment through your own Superannuation Fund.

How does SMSF IS EASY work?

There are laws around the SMSF setup, administration and buying of property which must be followed if you decide to go down this investment path. Our team is in place to guide you through these steps to make it as easy as possible, by completing the setup, administration and compliance that you will need to have in place for your own Superannuation fund.

Once all accounting and legal requirements have been met, we set up your Self- Managed Super Fund bank account and rollover all your existing superannuation monies into the new account.

With the setup of your new SMSF, all previous personal insurance policies will need to be reviewed by our Financial Planner before being re-established. As part of this we will also protect your future superannuation contributions, to ensure that your Super Fund will never end up at a zero balance.

Working together At every stage of the fund setup, our Financial Planner will co-ordinate with your Credit Advisor (Mortgage Broker).

Your loan application will commence in conjunction with the completion of the investment strategy.

Self-Managed Super Fund

Behind the scene The initial setup includes the preparation and processing of all legal documents including a Trust Deed, Bare Trust Deed and Corporate Trustees as required by law. The accountant will meet with you and the Financial Planner to run through the deeds and legal documents prior to signing. The accountant will also prepare and lodge applications for TFN and ABN for the SMSF. He will prepare and lodge the initial bank account application with Macquarie Bank.

Ongoing An SMSF will require ongoing administration; there are monthly and/or annual fees for these services, and all fees are charged to the SMSF. There is usually a monthly fee charged for administration and accounting, which covers the monitoring of your SMSF, and gives you access to advice and information on all activities pertaining to the super fund bank account. Annual Financial Reports & Tax Returns must be completed as a legal requirement. A quarterly report is provided; this report shows you how your investments have performed during the quarter.

Credit Advice Your Credit Advisor will discuss the various lending options that are available to you for your investment strategy, including the SMSF option to set up and purchase property through your own Self-Managed Super Fund.

The Credit Advisor’s role is to help you select the most appropriate lender for your SMSF purchase. Lender’s fees can vary quite vastly and your Advisor is conscious of helping you understand the fee structures and the benefits to you.

Your next step Your Credit Advisor (Mortgage Broker), Accountant, Builder or Real Estate Professional can help you take the next step. They can help you to assess your capacity to buy property using your own Self-Managed Super Fund.

SMSFiseasy is a division of VFG Victorian Finance Group

7/57 Robinson St. Dandenong VIC 3175

Your consultant can fill in the initial application form, which is sent to SMSF Is Easy. Our Team will then put the pieces together for you.

CLIENTS

www.smsfiseasy.com

1. What is an SMSF? SMSF stands for Self-Managed Super Fund. SMSFs are super funds set up by individuals or a group of less than five people. SMSFs must meet a number of requirements, including: Have a trust deed that meets the requirements of the Industry (Superannuation) Act 1993 (SIS Act) Members cannot be employees of other members of the fund unless related Trustees cannot receive any remuneration for their services All members must be trustees or, if the trustee is a company, all fund members must be directors of the trustee company Only members can be trustees or directors of the trustee company SMSFs with only one member have slightly different rules.

2. What is the “Sole Purpose Test”?

SMSFs can only invest in assets that meet the sole purpose test, which means they must be for the core purpose of providing benefits for retirement. This means trustees cannot derive any current day benefit from assets purchased.

3. What are the trustee’s responsibilities when managing the fund’s investment?

All SMSF trustees must prepare an investment objective for their fund and implement an investment strategy to achieve it. The investment strategy must reflect the fund's purpose and circumstances and detail how it will Maximise member returns within an acceptable level of risk Diversify across a range of assets (for example, shares, property, fixed interest) Pay benefits and costs as required Meet member needs taking into account individual ages, income levels, employment and retirement needs 4. What type of investment can a SMSF make?

All investments must meet the sole purposes test. SMSFs can invest in traditional assets such as shares, property, bonds and cash as well as more complex financial instruments such as options and certain kinds of warrants. While superannuation law doesn’t stipulate what an SMSF can and can’t invest in, there are restrictions on the entities a fund can invest in and acquire assets from. For example, SMSF’s cannot Acquire assets from a related party Allow in-house assets (such as a loan, investment or lease of a fund asset to a related party) to exceed five per cent of total assets Borrow money except in limited circumstances 5. How long will it take to set up an SMSF? From the initial meeting with our Financial Planner the process should take between three to five weeks before the Investment Strategy is presented. During this time the Accounting & Legal will have completed setup of the ABN & TFN for the fund and established the SMSF Trust and the Corporate Trustee. While this is being completed your Credit Advisor should have applied for and obtained a conditional approval for the estimated loan.

6. Who is the legal entity on the contract of sale?

The legal entity will be the Bare Trust. Once the client has made the selection, a) an expression of interest can be signed or b) a contract of sale with an ‘and or nominee’ noted, as this allows the nomination of the Bare Trust to be the purchaser of the property.

SMSFiseasy is a division of VFG Victorian Finance Group

7/57 Robinson St. Dandenong VIC 3175

7. How long does it take to get the Unconditional Loan Approval?

Please allow a minimum of four weeks for the process to be completed. During this time the Bare Trust will be setup, the contract of sale will be sent to the lender and the valuation will be done. The Bare Trust is specific to the property and the Lender.

8. How long do you need for settlement?

For property purchased through an SMSF structure it is important to have as long a settlement as possible, we recommend a minimum of 60 days for settlement. Your Credit Advisor should be consulted when signing a contract for an SMSF purchase, as a longer settlement may be required depending on the lender selected.

The FAQ’s and Timeline are to be used as a guideline and for information purpose only. They do not represent advice. Clients must seek advice from a Financial Planner before proceeding with a purchase of property through an SMSF structure.

CLIENT

www.smsfiseasy.com

1. First appointment with Financial Planner Financial Planning Accounting & legal Credit Advice Property Specialist

Commitment fee has been paid

2. Registration of fund Financial Planning Accounting & legal Credit Advice Property Specialist

ABN & TFN application

3. ABN & TFN is subject to ATO time frames. Normally ranges between 2 weeks to 1 month

4. SMSF trust & Corporate Trustee is setup ABN & TFN application to the ATO Prepare the fund strategy Insurance proposal Suitable lender chosen

5. Lending process starts

after Fund is setup & ABN & TFN is registered

Lender application is completed Submission made to the lender

Tracking the progress

Financial Planning Accounting & legal Credit Advice Property Specialist

Financial Planning Accounting & legal Credit Advice Property Specialist

SMSFiseasy is a division of VFG Victorian Finance Group

7/57 Robinson St. Dandenong VIC 3175

6. Presentation of fund strategy

7. At this stage the client will identify

8. Bare trust can only be setup

9. SETTLEMENT PROCESS

Deeds & Trust completed Insurance lodged Loan approval in principle

once the property is selected Details will be sent to the lender for full approval

a suitable property

CLIENTS

www.smsfiseasy.com

MEMBERS SUPERANNUATION GURANTEE

9.25% EMPLOYER CONTRIBUTION

TENANT

SMSF

100%

Application for finance to purchase

PROPERTY

(minimum amount required)

20% of property price plus cost

Rental income

Max 80% of member funds

CORPORATE TRUSTEE

INFLOW

BANK ACCOUNT BANK 20% remains in ACCOUNT SMSF members investment fund

BARE TRUST

100% of member funds

Loan repayment

LENDER

(maximum borrowing allowed)

80% of property price

Rollover from members fund/s

CORPORATE TRUSTEE

7/57 Robinson St. Dandenong VIC 3175

SMSFiseasy is a division of VFG Victorian Finance Group

OUTFLOW TRANSACTION BY LEGAL ENTITY

Mapping an SMSF