Have Questions?

At Northgate Property Solutions, we know you might have questions about setting up an SMSF, managing your accounts, or understanding property lending options. That’s why we created our FAQ page, to make things easier for you. It’s a simple guide to answer common questions and help you feel more confident about your financial decisions.

WE'RE HERE TO SUPPORT YOU EVERY STEP OF THE WAY

YOUR QUESTIONS ANSWERED BELOW

What is an SMSF, and how does it work?

An SMSF is a private superannuation fund that you manage yourself. It can have up to four members, all of whom must be trustees or directors of a corporate trustee. The fund is regulated by the Australian Taxation Office (ATO).Any individual can be a member as long as they are not an employee of another member unless they are related. Each member must also be a trustee or director of the corporate trustee.

What are the trustee responsibilities?

Trustees are responsible for managing the SMSF according to its trust deed and superannuation laws. This includes making investment decisions, maintaining records, and ensuring the SMSF complies with regulations.

What investment options are available in an SMSF?

SMSFs offer a wide range of investment options, including shares, property, term deposits, and collectibles. Generally, SMSFs cannot:
- Lend or provide financial assistance to members or related parties,
- Acquire assets from members or related parties,
- Breach the in house asset rules,
- Use collectables and personal use assets in a way that provides a present-day benefit,
- Allow trust distributions owing to the SMSF to remain unpaid.

No one associated with your SMSF should get a present-day benefit from its investments.

More information can be viewed here: https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/self-managed-super-funds-smsf/smsf-investing/restrictions-on-smsf-investments/what-are-the-smsf-investment-restrictions
‍

Can I borrow money to invest within my SMSF?

Yes, but only under strict conditions through a Limited Recourse Borrowing Arrangement (LRBA). This is typically used for property investment within the SMSF.

How do I roll over my existing super into an SMSF?

You can roll over existing superannuation funds into your SMSF by contacting your current super fund and completing the necessary rollover forms.

What is a bare trust, and why do I need one?

A bare trust, also known as a custodian or holding trust, is used in SMSFs to hold the legal title of a property purchased with borrowed funds under an LRBA. The SMSF holds the beneficial interest.

What are the roles of the trustee and the SMSF in a bare trust?

The bare trust trustee holds the property title on behalf of the SMSF. The SMSF has the beneficial interest and receives all income and capital gains from the property.

Can I use a corporate trustee for the bare trust?

Yes, a corporate trustee can be appointed for the bare trust.

How is the bare trust different from the SMSF?

The bare trust is solely for holding the legal title of the property acquired through an LRBA. It is separate from the SMSF, which holds the beneficial interest and manages the fund.

Do I need a separate bank account for the bare trust?

No, the bare trust does not require a separate bank account. All financial transactions should be processed through the SMSF's bank account.

What happens to the bare trust once the loan is repaid?

Once the loan is repaid, the legal title of the property can be transferred from the bare trust to the SMSF trustee, and the bare trust can be dissolved.

Can the property in a bare trust be used for personal use?

No, the property must solely be used for investment purposes as per the SMSF's investment strategy and superannuation law.