10. Tax transparency
The transactions that take place in an SMSF are highly transparent. It’s possible to directly see the impact of franking credits, CGT and other tax impacts.
11. Tax management
Some SMSF investors are attracted by the incorrect perception that only their own fund will allow them to benefit from franking credits. But others see a real advantage in the state-based property tax concessions available to SMSFs.
12. Limited recourse borrowing arrangements
An increasing number of investors are attracted to SMSFs because limited recourse borrowing arrangements allow an investor to have more money invested in super. The borrowing arrangements can sometimes effectively allow an investor to work around the contribution caps.
13. Pension transaction transparency
All large super funds use unitised investments to provide pensions. This creates a large number of problems that don’t arise in SMSFs, because SMSFs must value assets at market value each balance date (that is, once per year); nearly all SMSFs aren’t unitised; and SMSFs can pay their pension members the actual income earned on their investments.
