What can a SMSF Invest in?
Investing through your SMSF is a tax-effective way to create wealth. Income from your SMSF (including capital gains) is taxed at concessional rates, so you should end up saving more money for your retirement.
But before you start anything; before you decide whether or not investing in property through your SMSF is right for you, you should talk to us. We can’t recommend this enough; the rules and regulations for setting up a SMSF are complex. So, it’s important to get specialist financial planning, accounting, and legal advice.
SMSF Fund investment portfolios can include many of the following investments:
- Cash management accounts.
- Term deposits.
- Managed funds (Australian and international).
- Listed Australian shares.
- Listed unit trusts (property, investment).
- Listed investment companies.
- Overseas listed shares.
- Residential property.
- Commercial property.
- Industrial property.
- Property purchased with borrowed funds (limited recourse borrowing).
- Property partnerships with non-related parties.
- Shares in private companies with non-related parties.
- Options, warrants, CFDs and other “exotic” investments – these assets are permissible with the proper investment strategy.
The first step is to ensure your Trust Deed allows you to invest in the items you are considering. Once satisfied the Trust deed does not exclude an investment, the types of investments the SMSF actually holds are determined by the fund’s investment strategy, which is formulated by you, along with the other members in the fund.
An important benefit of this having this ultimate control is that, during retirement phase, you can continue to invest in growth assets. This contrasts the approach of many retail providers, who lock ‘pension phase’ investors into income-producing assets such as cash and fixed interest, increasing the risk that the investor may outlive their retirement savings.
Please contact us for more information about the regulations and your personal circumstances on 1300 788 491.
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