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As of June 2020, Australia has 593,000 self-managed super funds (SMSF) that have about USD 733 billion in assets. Although SMSF already has over 1.1 million members, the Australian Taxation Office sees the number of members growing as time passes.

Why are more and more Australians setting up SMSF accounts and how can you, a small business owner, benefit from it? This article will answer all of those questions and more. 

Superannuation vs. Self-Managed Super Fund

Superannuation and SMSF are very similar. But they differ in the initial creator, the maximum number of members, and the primary fund manager.


Superannuation or super fund is a company-created pension program that is for the benefit of retiring company employees. Also called company pension plans, employees deposit funds in a superannuation account that will continue to grow until withdrawal or retirement.

As a company-initiated program, the corporation is in charge of managing the funds. They can invest the funds however and wherever they think is most profitable. 

Self-Managed Super Fund

Unlike a super fund, SMSFs are not company created accounts. Individuals work with their accountants to establish an SMSF. Since SMSFs are primarily a small-scale super fund, the ATO has ruled that SMSFs are only allowed to have a maximum of five members. 

Despite the membership restriction, SMSFs have many benefits. These advantages include having free reign on managing the funds and tax claims. Aside from these, SMSFs are considered to be more cost-effective.

SMSF Benefits for Small Business Owners

Personal SMSF funds are ideal for diversifying personal portfolios, growing wealth, and preparing for retirement. For business owners, SMSFs have three main benefits: value maximisation, tax breaks, and retirement income.

Business Value Maximisation

To prepare for the future, most business owners turn to commercial property investments and look to SMSFs for funding. This means that you can buy the building and land where your business stands with SMSF.

Since the SMSF legally owns the property, you would have to lease the property from the SMSF. This gives you a fallback in case your business closes. You can also lease the land and building to another business making a new revenue stream for you.

Tax Breaks

SMSFs have many opportunities to minimise taxation. Firstly, they have minimal stamp duties (about 15 per cent). Secondly, they are required to pay little to no capital gains tax after selling off assets. Lastly, they can be a legal justification for claiming business expenses on SMSF-funded assets.

Legally, you can transfer the ownership of your commercial properties to your SMSF and pay minimal tax duties afterwards. You can also increase your profit margin when you decide to sell SMSF-funded assets. You can also claim tax deductions on rent as a business expense if your SMSF owns your business’s land and building.

Retirement Income

Through rent payments and the like, your SMSF will grow over time. That fund will continue to generate income well into your retirement years.

Regardless of whether you want to sell off your business when you retire; or pass it on to your children, you can still have a ripe income stream from your SMSF. Again, if you do decide to sell your business, you will pay a reduced capital gains tax rate for the sale.


A self-managed super fund offers a lot of benefits for business owners. SMSFs can help fund commercial asset acquisitions, provide tax breaks and deductions, and offer a stable revenue stream upon retirement.

Despite the SMSF advantages, it is not for everyone. To know if setting up an SMSF is the right move for you, speak with your accountant or financial planner first.

Wealthy You is one of the most trusted self-managed super fund brokers in Sydney. Our experienced team of financial experts are ready to help you understand, set up, and manage your SMSF. Contact us today to learn more about how we can help you!