Trading via self managed super fund (SMSF)

Dec 03, 2011

I am thinking about setting up a Self Managed Super Fund.  If I do, can I use my super monies to trade?

As the name implies a self-managed super fund (SMSF) is a type of super fund that the members manage it for their own benefit.  If you have the time as well as the expertise, including advisors that you can call on, to devote to managing your investments then setting up a SMSF may be an option for you to look at your retirement future.

One of the main benefits of having a SMSF is having the freedom of investment choice in allowing you to decide how and where to invest your superannuation monies. They are growing in popularity as members’ balances rise and they become more knowledgeable about managing their retirement savings with over 27,000 new SMSFs established last year.  And it is that attractiveness of being able to invest super monies in particular assets means that similar growth is expected to continue for some time yet. 

However SMSFs cannot operate trading entities so effectively any share activities need to be done as an investor rather than as a trader. You can purchase (and sell) exchange traded options as part of a hedging strategy but any premiums paid (or received) are to be show as CGT events.

Whilst you have the ability to invest your super monies in shares, options & Contracts for Difference (CFDs), it must be in accordance with your written investment strategy for the fund and also in compliance with the SIS Act that regulates SMSFs. 

Be particularly careful with any investment in CFDs.  If you deposit funds with a CFD provider as security for the fund’s obligations to pay margins, you would contravene the SIS Act.  This is because you are effectively providing a charge over fund assets.

 

This article first appeared in the Sept/Oct 2011 issue of YTE Magazine www.YTEmagazine.com. Copyright Your Media Edge Pty Ltd 2011. 

Tags: SharesSMSF

Author: Mr Taxman

Comments

"Hi Mr Taxman, I am considering trading forex through my smsf. Am I best to open a pam account to trade linked accounts in the fund? What deductions can I apply to forex trading? Can I include commissions or spreads as a deduction? If I am doing the trading, am I able to pay myself a fee for trading and is it a deductable item? Can I pay it back into the fund? I have 2 children with Permanent Disabilities. Are they able to claim a pension from the fund under the special conditions? I am considering changing from accumulation to pension phase. before opting to trade forex? Will this change any of the above listed questions?"

By: clyde tanner on Mar 02, 2013 11:50PM

"Hopefully I answered these questions in your private email that you probably sent at the same time. Worthwhile seeing a professional face to face before implementing alot of your ideas."

By: Mr Taxman on Mar 03, 2013 12:31AM

"I'd like to see answers to all of these questions, as they were asked, without the private email. I'm thinking that many people would like to trade forex on their SMSF "

By: Jeremy Britton on Aug 16, 2013 8:31AM

"Is it possible to see the answers to those questions? Thanks."

By: Andrew on Apr 08, 2014 2:07AM

"Can I please see the answers to Clyde Tanner's Forex questions?."

By: Ruey on Mar 30, 2017 12:45PM

"Just wondering if this question has been answered? I'm looking to trade options with major companies in the US and seeing if this was possible."

By: Van on Feb 10, 2015 11:16AM

"I am inerested to do smsf to trade forex particularly Gold/usd. I wrote an expert advisor that pass backtest result with profit for 5 years straight. I want to use it for my smsf for say 50% of my total super fund. How can i get this setup with smaf so that it compliance with legislations?"

By: Ben on Apr 09, 2019 9:48PM

"can i trade Forex in my SMSF"

By: zac on Jun 07, 2019 1:58AM

"Hi, Very informative post and really appreciate the effort you put into it. Every one now a days is trying to gather more information about Forex trading."

By: Vantagepointx on Jul 29, 2020 6:08AM

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