At Royale Capital we believe in the power of knowledge. A knowledgeable client is the best client. For that reason we are constantly striving to make sure that our clients (and even our prospective clients) understand all the aspects of a Self Managed Super Fund.

One of the most frequently asked questions we hear is, who is eligible to become a trustee?

One of the most important components of any SMSF are its trustees. A trustee can be either an individual or a trustee company.

Approximately 65% of SMSFs have individual trustees. When this option is chosen every member of the SMSF must also be a trustee. A SMSF cannot have a single trustee. When a trustee company is appointed, all members must be directors of the trustee company.

It is important that anyone who wishes to take on the roles and responsibilities of a SMSF trustee fully understand just what that role entails and what their responsibilities will be. They must understand the investment restrictions imposed on trustees of a SMSF; the rules and limitations surrounding contributions and benefit payments within a SMSF; and the administration involved with a SMSF.

Generally, anyone who is 18 years of age or older and who is not under a legal disability or considered ’disqualified’ from eligibility under the SIS (Superannuation Industry (Supervision)) Act can be a trustee of a self managed superannuation fund.

Trustees are expected to act honestly in all matters concerning the fund. You are expected to exercise the degree of skill and judgment of a prudent person handling the financial affairs of another person and to act in the interest of the fund’s members and their beneficiaries in all matters. This in addition to being expected to meet the requirements of SIS and maintain records and discharge ATO requirements.

SMSF trustees are required to sign a ‘Trustees Declaration’. This is a formal document designed to make trustees accountable for their responsibility to abide by the law; fulfill their trustee duties; understand investment restrictions in a SMSF; and understand and adhere to administrative requirements. This declaration must be retained for 10 years and made available to the ATO upon request (failure to do so may result in penalties).

The experts at Royal Capital can fully explain what these responsibilities mean and can address any questions you may have regarding your Trustees Declaration”.

Not everybody is qualified to be a trustee. Individuals who have ever been convicted of an offence involving dishonesty; have ever been subjected to a civil penalty order under the SIS Act; are an undischarged bankrupt, have been disqualified by the ATO or APRA, or has ever been disqualified by a regulator cannot be trustees.

A company cannot be a trustee if a director, secretary or executive officer is a disqualified person, there is application to wind up the company; or a receiver or liquidator has been appointed

In a nutshell, SMSF trustees are ultimately responsible for each and every aspects of the management of the fund. Penalties for non-compliance can be significant and in severe cases can include tax penalties, fines and even possible imprisonment. Having a company like Royale Capital to advise and make sure you understand all the intricacies of being a trustee is essential.

You should note that administrative penalties also apply to SMSF’s for failure to lodge documents on time and making misleading statements in documents. It is therefore extremely important that all required SMSF reports be filed properly and on time. It is here that the services of a company that fully understands how to prepare and when to file the many SMSF documents legally required is a must have. Capital Royale provides monthly, quarterly and year-end reporting as part of our Royale Capital ActiveSuper program.

To learn more about all the financial services and educational programs offered by Royale Capital and our Private Wealth program, visit our website at http://www.royalecapital.com.au/ or give one of our expert consultants a call at 1300 924 463.

At Royale Capital we are often asked about using SMSFs to purchase NRAS rental properties and what are the benefits of doing so. The below provides a brief overview of the NRAS Scheme and the benefits of purchasing NRAS rental property through your SMSF.

In 2008 The National Rental Affordability Scheme or NRAS was created to provide affordable rental properties to Australian families. This scheme offers a unique opportunity for the majority of investors as it generates cash flow positive returns together with the capital gains in property value historically associated with NRAS property investments.

In effect, investors can purchase rental properties which in turn they rent to qualifying families at a reduced rent that is at least 20 per cent below the prevailing market rate.

In return the investor receives significant annual tax credits and a ten year membership of the program. As of this writing the annual National Rental Incentive is income tax-free; is indexed annually to the rental component of the Consumer Price Index (CPI) and is complemented by existing taxation arrangements including depreciation. Currently the Government contributes $7,143 per dwelling per year as a refundable tax offset while a State or Territory Government contributes $2,381 per dwelling per year in direct or in-kind financial support.

This Tax Credit could amount to over $100,000 over the next 10 years. So the Tax Credit received per anum for becoming a property investor would in most cases be larger than the rental discount being given to the tenants.

It is estimated that over 1.5 million households will be eligible for tenancies under the NRAS program, giving property purchasers a high level of secure rental demand. So not only are the tax savings considerable, but the investor is all but guaranteed qualified renters for a period of 10 years.

Rental properties are an asset that can be purchased through an SMSF. Royal Capital specializes in this sort of investment strategy and our Private Wealth members are greatly benefiting from the NRAS Scheme.

NRAS can be a great fit for SMSF’s wishing to enter the property market as most NRAS properties are positively geared right from the start. To learn more about all the services offered by Royale Capital and our Private Wealth program, visit our website at http://www.royalecapital.com.au/ or give one of our expert consultants a call at 1300 924 463.

Did you know that most superannuation funds run out 1-10 years from retirement? That the current average superannuation payout is $130,000 for males and $45,000 for females? That 63 % of the current work force are baby boomers…what happens when they take their pension pay-outs? That up to 20% of defined benefit superannuation funds may have insufficient money to meet their payouts? That due to some of these 22% of people over 65 years need to continue working? That because most Australians are now living well into their 80’s; almost 70% of retirees now claim some form of government support?

Don’t get us wrong. We’re not trying to be prophets of doom using scare tactics to get people to call us. At Royal Capital we believe in the power of education because an educated individual is our best customer.

At Royale Capital we specialize in helping people learn how to self manage their superannuation fund. Managing your own super can give you greater control and flexibility. We guide you and teach you. Managing your own superannuation fund also gives you the discretion to pick and choose your own strategy and investments, as well as take advantage of the tax benefits unique to a Self Managed Superannuation Fund or SMSF.

A self managed superannuation fund (SMSF) is a specific type of trust permitted under Australian law where money and/or assets are held and managed on behalf of up to four members to provide future retirement benefits.

The number of Australians choosing to manage their own super through a self managed super fund (SMSF) is far greater than you might think. At 31 March 2010 the total superannuation assets in Australia was $1.26 trillion and SMSFs held the largest proportion of superannuation assets accounting for over $400 billion or 31.8 per cent. There are currently over 422,000 SMSFs with an estimated 2,000 new funds being established each month.

The difference between a successfully managed SMSF and one that will not do so well (if it does well at all) is knowledge. Here at Royale Capital our goal is to help education you so that the investment decisions you make are the right ones. Our team of consultants have a combined 50 years hands-on experience in the fields of Self Managed Superannuation Fund administration, Financial Markets and Property Services. When you become a Royale Capital Private Wealth Member our knowledge becomes your expertise.

Our team of experts will assist you every step of the way with the establishment, compliance and administration of your Self Managed Superannuation Fund.

Whether you are a beginner or an expert trader/investor, you will find the simple yet effective methodologies you need to make consistent returns from the stock markets without risking your livelihood.

One of the more attractive benefits of a SMSF are that unlike larger superannuation funds where you may be limited in a direct say as to specific investment decisions and other management decisions, a self managed superannuation fund enables a far more transparent and direct involvement in the day to day investment decisions and therefore the overall performance of the fund. This alone has made SMSF an increasingly attractive option for higher net worth individuals, self employed people and even couples choosing an optimum vehicle for estate planning.

To help you succeed, some of services Royal Capital provides for our Private Wealth Members is the administration of the fund, the trustee and the member records; maintaining accurate accounting records in a form that can be clearly understood for the purpose of audits; and administering benefit payments and pension payments to name just a very few. We also provide comprehensive quarterly and annual reports.

Before getting started you need to contact one of our professional consultants either by filling out our simple online application form or calling us at at 1 300 924 463 between the hours of 9am and 7pm Monday through Friday.