Setting up your SMSF

A self-managed super fund (SMSF) is another way you can save for your retirement. However, setting up and managing your SMSF is quite complicated. It’s important that you understand your responsibilities.

Published April 28, 2015

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Why set up a SMSF?

A SMSF is generally set up to give the members greater control over their retirement savings and investments.

It’s important to note that a Self Managed Super Fund is not suitable for everyone – it requires a large amount of time and skill in order to run it effectively.

Before setting up a fund it is important to consider whether you have the appropriate amount of time, skill and knowledge to successfully manage the fund.

You should also consider:

Requirements and Obligations

When you set up your fund, you will have a number of legal, moral and ethical obligations you need to comply with:

Trustee Obligations:

How do I establish a Self Managed Super Fund?

Before you set up your own fund, you need to consider the above information regarding your obligations as a trustee and the time, knowledge, skills and funds required.

If you do decide that you want to establish an SMSF, you have a number of options when it comes to the structure:

  1. Choice of Trustee
  2. Setting up a trust
  3. Registering your fund
  4. Make sure your fund meets residency requirements

Choice of Trustee

Individual Trustee

An individual Trustee is when one or all of the members of the fund are appointed as the trustee. Generally all members of the fund will be required to be trustees.

The following must apply when an individual trustee is appointed in order for the fund to comply as an SMSF:

  • The fund can only have four or fewer members
  • Each member must be a trustee and each trustee must be a member
  • Members of the fund are not allowed to work for one another. Exceptions are made when the members are related.
  • No member of the fund works for another member except in the case where they are related
  • Trustees cannot be paid to perform their duties as trustees
Corporate Trustee

A corporate trustee is an incorporated company under law that acts as a trustee. It can be an already established company that you have set up or you can set up a new company.

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Who can be a trustee?

A trustee can be anyone over the age of 18 who is not legally disabled (including by bankruptcy or mental incapacity) – except in the case where they are a disqualified person.

Setting up the trust:

As a Self Managed Super Fund is a type of trust, it needs to be set up like any other trust would be. In order to create a trust, you must have:

A disqualified person can be: 

A company is not allowed to act as a corporate trustee if:

Once the trust deed is executed and funds are contributed to the fund in the form of money or the transfer of assets, the fund is seen as being established.

Fund assets need to be held in the name of the fund and not in the individual name of the trustee or members.

Registering your fund

Once the trust deed has been executed and assets have been contributed, the fund must be registered with the Australian Business Registerer (ABR), who will conduct a risk assessment of your fund as well as all individual members. They may also ask for additional documentation.

The ABR will also provide you with a Tax File Number and Australian Business Number (ABN) for your fund as well as registering your fund for GST.

Opening a bank account

You are required to open a bank account in your SMSF’s name so you can accept cash contributions and rollovers as well managing your fund’s operations.

Any contributions, investment earnings or benefits made into or out of the bank account by members needs to be recorded.

Investment Strategy

A Self Managed Super Fund investment strategy must be prepared before you start making any investment. The investment strategy:

When you are preparing your investment strategy you should consider:

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