Self Managed Super Funds, Trusts and Companies

Self-managed super funds

SMSF home loans can be used to buy property through your SMSF and give your super balance the benefit of property growth. This article will help you find out how SMSF home loans can be used to purchase property and secure your retirement. You’ll also be able to compare SMSF home loans in the table below and enquire with a lender or mortgage broker to find out more.

A self-managed superannuation fund, or SMSF is a small super fund with less than five members in it. It’s different from a standard super fund in that it is set up as a trust with the members being in direct control, meaning they can invest in what they like. This can include shares, property, cash, trusts and other managed investments.

Trust business structure

A trust is a relationship where a trustee (an individual or a company) carries on business for the benefit of other people (the beneficiaries). For instance, a trustee may carry on a business for the benefit of a particular family and distribute the yearly profit to them.

A trust is not a separate legal entity. A trust may be discretionary (i.e. the trustee decides how profit will be distributed among beneficiaries) or have fixed interests (i.e. it will benefit certain people in predetermined proportions). Commonly, the trustee is a company (a corporate trustee); often this business structure is more tax effective.

Company business structure

By law, a company is a distinct legal entity separate from its shareholders or officers. In Australia, the most common types of company are:

• ‘proprietary limited’ companies (cannot raise money from the general public through share issues)
• ‘public’ companies (usually formed to raise or borrow public money by listing the company’s shares for trading on a stock exchange).

All companies are governed by the Australian Securities and Investments Commission (ASIC), which administers the Corporations Act 2001 (Cwlth) and other legislation. Public companies must also comply with the rules of the Australian Stock Exchange.