Friday, 19 April 2013

SMSFs – investment strategies

One of the major benefits of establishing an SMSF is the ability to set and execute your own unique investment strategy.  However, at the same time, you do have a legal responsibility as a trustee of the fund to ensure that your investment decisions are designed to protect and increase your members' benefits for retirement.  There are also numerous legal requirements that your investment strategy must comply with, including restrictions on what you can invest in and requirements to keep your investments separate from the personal and business affairs of fund members.

Today, I’ll discuss:
  • The requirements set out by the ATO to develop an investment strategy
  • Steps to develop your investment strategy
  • Restrictions on investments for SMSFs
  • Restrictions on investing in collectables and personal use assets
  • Requirements around ownership and protection of assets
  • Restrictions on acquiring assets from a related party
  • Restrictions on in-house assets
  • The sole purpose test

Legal requirements for your investment strategy

SMSFs are required to invest according to a written investment strategy. The investment strategy should be in writing so that you can demonstrate how your investment decisions comply with both the strategy and the super laws.