The Rules Of Superannuation

To protect the superannuation system, and make sure superannuation is used for retirementpurposes, there are effectively two sets of legislation that regulates and imposes penalties when superannuation is misused. The first is the Superannuation Industry (Supervision) Act. This legislation was originally designed to regulate superannuation funds that look after other people’s money, which today are industry super funds and commercial super funds. The unfortunate result of SMSFs being controlled by legislation that is meant to protect members from trustees, there is a great deal of documentation that must be prepared to prove that the members are not ripping themselves off when acting as trustee. This means if you choose to have an SMSFs you always must wear two hats. The other act that regulates, and has the most impact on superannuation members, is the income tax act. Due to the major tax advantages that superannuation has, and because SMSFs are administered and controlled by the members, the Australian Taxation Office regulates SMSFs. There are 10 main rules and tests that relate to the administration of a super fund contained in the SIS Act