Steps to SMSF set up success

Self managed super funds (SMSFs) are regulated by the ATO and setting up your fund properly is crucial or you could lose tax concessions, reduce retirement benefits, incur penalties, or just add to the administrative burden.

The ATO recommend getting qualified professional help when setting up a SMSF.

A Wilson Teis accountant can take you through the process step by step and help you consider all scenarios, now and in the future, when setting up your SMSF.

Set Up

Pick a structure

SMSFs can either be run by a group of up to four (minimum two) individual trustees or by a corporate trust (i.e. a company set up to act as trustee) where each member is a director of the corporate trust.

Appoint Trustees

Trustees are appointed under the terms of the trust deed and you need written consent from each trustee. Eligible trustees must be over 18, have no criminal convictions, bankruptcy or insolvency.

Draft a Trust Deed

The governing rules of your SMSF are set down in the trust deed so it's fundamental that you get it right. The trust deed covers a range of things including:

• The funds objectives and who can be members
• What contributions can be made and what benefits can be paid
• Procedures for winding up the fund

Establish

The following steps will legally establish the fund:

• Open a bank account in your funds name
• Deposit any personal contributions into the funds bank account
• Lodge an application to register your fund with the ATO
• Obtain a TFN and ABN from the ATO for your SMSF
• Register for GST if the fund's annual turnover is greater than $75,000

Operate

The last but still crucial steps to make your trust operational include:

• Prepare a written investment strategy - this is core to securing you retirement benefits
• Organise rollovers from your existing super accounts - you need to provide proof that your fund is regulated
• Establish your record keeping - the list is long!
• Appoint an independent auditor
• Prepare for the future – including making death benefit nominations and considering insurance cover for the members of the fund.