In order to encourage savings for retirement, superannuation funds are generally taxed at concessional rates (from 15%).

However, higher rates of tax and penalties apply if you do not act in accordance with the law, or appropriately manage your superannuation investments.

Refer to our commentary on Investments by SMSF, which outlines some investments which may be prohibited. In addition, the ATO has useful guidance including:

• Setting up a self managed superannuation fund (http://www.ato.gov.au/superfunds/content.aspx?doc=/content/00182478.htm)
• Running a self managed superannuation fund (http://www.ato.gov.au/superfunds/content.aspx?doc=/content/46427.htm)