How to Rollover Super to SMSF

Rolling over your entire superannuation balance or part of it into a self-managed super fund (SMSF) can help you maximise your super funds and prepare for retirement. In this blog, we will explain how to rollover super to SMSF.

Benefits of moving to an SMSF from a traditional super fund

If you’re currently investing in a superannuation fund and thinking about moving to an SMSF, the latter has several benefits worth considering.

Independence

Managing your SMSF gives you complete control and independence over your investment options. In contrast, managing a retail super fund or industry super fund limits your investments to those coming from experts in that fund.

An SMSF doesn’t limit or restrain how you manage your funds—you can invest aggressively or conservatively. Your investment style can fall somewhere between those two extremes.

Each person is different, so manage your SMSF as you see fit. Whether you’re investing in property, bonds, cash, or shares, a self-managed super fund allows you to easily spread out your investment options.

Tax advantages

SMSF tax benefits give investors a good reason to rollover from their superannuation fund. Contributions to a self-managed super fund are subject to a minimum tax rate of 30%. Personal concessional contributions subject investors to a 15% tax. Capital gains tax is even lower at just 10% on assets held for over a year. The Australian government does not tax earnings in your pension phase.

Always seek professional advice on SMSF tax benefits. Before you claim any deductions from your self-managed super fund, check tax legislation with the Australian Taxation Office (ATO).

How to rollover your entire super balance to an SMSF

Here are the steps on how to rollover super to SMSF:

Make sure your SMSF can already receive contributions: You must ensure your self-managed super fund is registered with ATO and that your SMSF’s information is current and accurate. If your SMSF isn’t ready for rollover, your super fund cannot complete your transaction.
Verify your SMSF membership: Once you ensure your self-managed super fund complies with Australian tax laws, your current super fund must verify that you’re a member of your SMSF. You can verify your membership via your details on the ATO’s official website. You must inform the ATO if any membership changes arise.
Fill out your rollover request form: You must inform your industry super fund or retail super fund that you’re going to allocate the entire amount to your SMSF. Fill out the request form on your super fund’s official website. You can send the completed form to your super fund via email or Australia Post.

Another option is to fill out the ATO’s form (“Rollover initiation request to transfer whole balance of superannuation benefits to your self-managed super fund”) and include pertinent files for your industry super fund or retail super fund.

Your super fund will complete the next steps for you: After you complete the preceding steps, your super fund will allocate your superannuation funds into your SMSF. Australian Prudential Regulation Authority (APRA)-regulated super funds typically take three days to finish the transaction.

The ATO regulates all super rollovers via SuperStream Rollovers v3, a system that improves transaction speed and accuracy. You must provide an electronic service address (ESA), Australian business number (ABN), and your current information to the ATO.

Should you rollover only a partial amount of your super?

Now that you know how to transfer super to SMSF, rolling over a partial amount has become possible. In that scenario, you will retain the active status of your industry super fund/retail super fund and your SMSF. This option has unique advantages and disadvantages.

Retaining your superannuation fund is ideal if you prefer to continue paying insurance premiums. There are instances when you pay lower insurance premiums via an industry super fund or retail super fund rather than an SMSF. Doing this also saves you the trouble of setting up a new insurance within or outside your SMSF.

Another advantage of retaining a partial super fund balance is that it allows you to invest in liquid assets such as shares. On the other hand, illiquid assets such as property are more suitable for an SMSF.

If you need assistance on how to rollover super to SMSF, contact the team at TW Accounting. Respected Gold Coast SMSF accountants and small business accounting specialists.