SMSF SETUP STEPS

WHAT TO CONSIDER WHEN
SETTING UP A SMSF

1. 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 Publications and video’s.

Alternatively you might need to obtain advice on the suitability of setting up a SMSF based on your investment intentions and your retirement objectives in your SMSF. Most SMSF members/trustees, appoint an administration company (such as My SMSF) and often appoint a financial adviser to assist them with their SMSF responsibilities and with investing in their SMSF.

WATCH THE SETTING UP A SELF-MANAGED SUPER FUND VIDEO

SUPER RETAILSMSF
Tax / Audit
Accountant / Auditor
BookKeeping
Members
Investments
Members
Legal
Administration provider
Fee1.50%$1,100
Number of members 11-4

2. HOW MUCH DO YOU NEED TO START AN SMSF?

The next step is 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 contributions into super, and the ongoing costs involved.

We suggest that $150,000 – $200,000 as a minimum starting balance. Find out if your super is in a defined benefit fund before setting up a SMSF.

Our SMSF Setup advice fee is only $330

3. CHOOSE THE NUMBER OF MEMBERS
IN YOUR FUND

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

4. CHOOSE YOUR TRUSTEE
(INDIVIDUAL OR CORPORATE)

Next choose your trustee. We suggest a corporate trustee company, particularly if you are intending on buying property in an SMSF, but you can also setup an SMSF with the members acting as individual trustees of the fund.

5. 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
  • Complete your investment strategy
  • Make you sure you complete binding nominations for your fund

COMPARE THE BENEFITS OF INDIVIDUAL VS CORPORATE TRUSTEE SETUPS

WATCH THIS VIDEO ON THE IMPORTANCE OF AN INVESTMENT STRATEGY

6. THE IMPORTANCE OF AN INVESTMENT STRATEGY

With your investment strategy, identify the asset allocation for your fund, IE: 60% property, 30% shares, and 10% cash. Finally don’t forget to include insurance to cover your loan 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.

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. 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.

SOME OF THE ONGOING TASKS WITH YOUR SMSF ARE THE FOLLOWING

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

WATCH THIS VIDEO ON SMSF PROPERTY AND BORROWING

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