SMSF Setup Steps

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What to consider when
setting up a SMSF

When starting your smsf journey, we suggest you do some research and understand the benefits,risks,responsibilities, and costs involved. My SMSF’s Clients complete an SMSF Education course so that they can understand their responsibilities.

STEP 01

Do your research or
get advice

The first step is to understand your responsibilities and the tasks associated with running an SMSF. We suggest you watch and download and read the following guides including our own “A guide to setting up an SMSF” and the Australian Tax Offices SMSF video’s and the Money Smart Site guides on SMSF’s

Retail Super SMSF
Tax / Audit Accountant / Auditor
Bookkeeping Members
Investments Members or Adviser
Legal Legal Docs Provider or Lawyer
Fee 1% of balance $1,100
Number of members 01 1-4
STEP 02

How much do you need to
start an SMSF

The next step to consider, is your starting balance and the number of members in your fund. This will determine whether setting up a fund is viable given your current super savings, your employer and personal contributions into super, and the ongoing costs involved with an SMSF.

We suggest that $100,000 – $200,000 as a minimum starting balance based on on our fees. Find out if your super is in a defined benefit fund before setting up a SMSF.

STEP 03

Choose the number of
members in your Funds

An SMSF is allowed 1- 4 members, who are related or unrelated. If you are related you cannot be working in the same business.

* An important consideration with family smsf’s ( children and parents), is an exit strategy, if your children decide to form their own SMSF in the future

STEP 04

Choose your Trustee
( Individual or Corporate )

Next choose your trustee. We suggest a corporate trustee company, which offers more asset protection, one fee per compliance breach and the flexibility to change members of the fund without a tax impact to the fund and its members. You can also setup an SMSF with the members acting as individual trustees of the fund which is the cheapest option but not necessarily the safest.

STEP 05

Setup your SMSF and create your Investment strategy

These are some of the common tasks associated with an SMSF:

  • Setup a company to act as trustee
  • Create a SMSF Trust deed
  • Apply for an ABN / TFN for your SMSF with the ATO
  • Open a bank account
  • Transfer your super from your current provider
  • Review your insurance and apply for replacement cover

With your investment strategy, identify the asset allocation for your fund, IE: 60% property, 30% shares, and 10% cash. Finally, do not forget to include insurance to cover your debts and complete binding nominations so that you can transfer your funds’ assets to your children or to your estate, should something happen to a member of the fund.

STEP 06

SOME OF THE ONGOING TASKS WITH
YOUR SMSF ARE THE FOLLOWING

  • Complete a Tax return and Audit each year
  • Attending to the bookkeeping for your fund (Income/ itemise fund expenses)
  • Review your investments and your insurances and update your funds investment strategy and deed if necessary
  • Review your binding nominations if your circumstances change

For some people setting up and running a SMSF will be easier than for others. The administration tasks, investments, and risk management are areas that most people will need assistance with. Remember that you fund needs to keep SMSF assets separate from personal assets. It is always best to seek advice if you do not understand what is involved with running an SMSF and remember the buck stops with you.

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