13 Self-Managed Super Funds
Investment decisions and rules
Investment choices
An SMSF can choose to invest in any asset that the trustees believes is appropriate. Trustees have a great deal of freedom to select investments that they think will suit the needs of the fund and its members. But there are some specific restrictions in legislation. Before making any investment Trustees need to ensure that:
- It is not prohibited by the trust deed
- It fits within the fund’s documented investment strategy
- It will meet the sole purpose test, and
- It does not breach specific investment SIS rules.
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Tip Under the sole purpose test, an SMSF’s investments must be used for the sole purpose of providing retirement or death benefits to members or member’s beneficiaries. Therefore, there can’t be any pre-retirement personal benefits provided to members or related parties (such as letting members use assets of the fund, e.g. holiday house). |
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