Interested in Self-Managed Super Funds (SMSFs) but confused by all the fancy terms?
The world of SMSFs can be a maze of jargon and acronyms that feels more like alphabet soup than a retirement plan
Our SMSF Glossary is your go-to guide for unravelling the intricacies of self-managing your super. Whether you’re a seasoned investor or just starting, we’ve got your back
Commonly used terms and acronyms:
ABN
Australian Business Number – A unique identifying number for entities in the Australian Business Register. Your SMSF will have one
APRA
Australian Prudential Regulation Authority – Regulates certain types of super funds, but not SMSFs
Arms-Length Investment
Investing at fair market value, treating transactions as if done at arm’s length
ATO
Australian Taxation Office – The government body overseeing taxes and SMSFs
Bare Trust
A simple trust structure used in SMSF borrowing strategies. Holds an asset until the loan is paid off
Binding Death Benefit Nomination
A direction that tells trustees who receives your super benefits upon your death
Complying SMSF
SMSFs regulated by the ATO, and granted a Notice of Compliance. Qualifies for a concessional tax rate of 15%
Contribution
The money or assets you, an employer, or another party put into your super fund
Contribution Cap
The maximum amount of money you can contribute to your SMSF in a financial year without incurring extra tax
Concessional Tax Rate
A tax rate of 15% applied to funds that comply with specific regulations
Non-Complying SMSF
SMSFs not regulated by the ATO or granted a Notice of Non-compliance. Taxed at 45%
Non-Recourse Lending
A loan where the lender can only claim the asset bought with the loan if you default
Notice of Compliance
Issued by the ATO to signify your SMSF complies with relevant regulations
Notice of Non-Compliance
Issued by the ATO to indicate your SMSF doesn’t comply with regulations
Preservation Age
The age you must reach to access your super. It varies but is usually between 55 and 60
Rollover
Transferring super from one fund to another, often done when setting up an SMSF
Sole Purpose Test
A requirement that your SMSF exists solely to provide retirement benefits to its members
Transition to Retirement (TTR)
A pension account allowing you to access super while still working, once you reach your preservation age
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The information provided on this webpage is intended to provide general information only and the information has been prepared without taking into account any particular person’s objectives, financial situation or needs. Before acting on such information, you should consider the appropriateness of the information having regard to your personal objectives, financial situation or needs.
