How to set up an SMSF
Setting up a self-managed super fund
As the name suggests, a Self Managed Super Fund is a super fund managed by individuals themselves. You will be the trustee of your SMSF and will need to comply with the relevant tax laws which govern the operation of this type of fund. The sole purpose of an SMSF is to provide retirement benefits for its members. The Self Managed Super Funds are heavily regulated by ATO and ASIC. Whether the super funds are beneficial for you or not, depends on your knowledge and circumstances. Find more information about setting up an SMSF in this article.
How to set up a self-managed super fund
Here are some important steps you need to take when setting up your SMSF.
- Trustees - You can have four members in an SMSF. These members can be either individual trustees or a company acting as a corporate trustee.
- Trust deed - Trust deed is a document listing the members, trustees, rules, investments, contributions, and wind up. The trustees need to sign and date the document and ensure that it is executed correctly under the law.
- Assets - To establish the trust, the fund needs to have assets until the benefits rollover or the trustees make contributions.
- Trustee declaration - This declaration ensures that the trustees understand their duties and responsibilities. It needs to be signed within 21 days of becoming a trustee or director. The trustee declaration must be kept safely as the ATO might ask you to furnish it.
- Register with ATO within 60 days of establishing the fund. Your SMSF needs to be registered to the Australian Business Register and when receiving tax benefits, you need to select “Regulated by ATO”. The fund also needs to be listed on the “Super Fund Lookup” so that other employers and funds can check the eligibility of your fund receiving rollovers or contributions. You will also need to register with an SMSF messaging provider before you can receive contributions. If the fund has an annual turnover of more than $75,000, it would need to be registered for GST.
- Tax file numbers of all the members are required to receive contributions and avail tax benefits.
- Open a bank account to receive income and contributions.
- Prepare an investment strategy that lists out the objectives and investments needed to achieve the goals of your fund.
In a nutshell, SMSF is tax-effective, offers more control over your investment and protection against financial risks like bankruptcy. However, they require in-depth knowledge of investment principles, regulations set by the government, and time.
Even though the SMSF can be managed by a professional, the responsibility would still be yours. Whether SMSF is a good option for you or not depends on your circumstances like knowledge, time, the assets you want to invest in, and your current super balance.
If you have any further questions regarding SMSFs and if they are a suitable arrangement for your needs, give Bottom Line Control Sunshine Coast accountants a call on (07) 5471 7077 and we can discuss all the options with you.
Comprehensive SMSF Services on the Sunshine Coast
Although SMSF is also called Do-It-Yourself Super, it is not so easy to do it. Setting up SMSF can seem intimidating, however, our SMSF advisers at Bottom Line Control can make the process easier for you. We provide comprehensive SMSF services - set up, administration, and compliance (preparing end of year accounts, fund’s tax returns and audits). For the very best in Self-managed super fund setup, auditing, and investment assistance, contact our experienced team on 5471 7077 or complete our online appointment request form today.
References: https://www.ato.gov.au/Super/Self-managed-super-funds/Setting-up/
