In a relatively short space of time, SMSF has become a very popular vehicle of retirement planning. While it has gained a lot of fame, a bit of notoriety has also come its way. There are critics claiming how SMSF gets tax favours and how compliance rules bypass important concerns like credit franking (divided swapping).
Critics have nothing worth a shout
More often than not, such charges have come to naught and those levelling them have failed to come up with anything worth a shout. This said, the lucrative SMSF industry is also beset with traps, and you have got to venture carefully on this terrain.
To begin, SMSF funds should not be named casually. It is best to stick to very short names or else banking systems may give you headaches. After all, some of them are not equipped to pass such long names in their ‘diary-entry’.
When there are multiple SMSFs, there is always more than a temptation to add numbers to the name. Resist the temptation! Think of this instance — let us say your tenant who is renting your commercial property listed in your second Super fund sues you. Now, if he gets to see a number on your fund, he presumes correctly that there is more than a fund and that he has got hold of a fairly rich defendant.
In fact, a lot of everyday issues, as well as technical backlashes, can be avoided by appointing a corporate trustee. If you keep a corporate trustee structure from the very beginning you won’t have to bother about shuffling on a later day and creating SMSF traps for yourself.