How To Set Up an SMSF

how to set up an smsf


Are you planning to set up an SMSF? Your SMSF Accountant can help you with the process but it is important to understand the steps involved. These are outlined below:


1. Establish a trust

Before you can register a SMSF with the ATO you need to decide whether it will be an individual trustee or corporate trustee and then create a trust and trust deed.


2. Obtain trust deed

The trust deed sets out the rules and conditions under which the SMSF will operate, so it is vital to start with a well-drafted trust deed.


3. Sign a declaration

Upon becoming a trustee or director of the corporate trustee of a SMSF, you are required to sign a declaration form stating that you understand your obligations, duties and responsibilities.


4. Lodge an election with the regulator

You must lodge an election to be regulated with the ATO. If an election notice is not lodged, the SMSF will not be treated as a complying fund for taxation purposes and the SMSF will be taxed at the highest tax rate.


5. Set up a bank account

The trustee of a SMSF will generally need to set up a bank account in your funds name so the SMSF can accept contributions, rollovers and earnings. The account will also be required to pay expenses such as annual supervisory levy, accounting fees and taxation liabilities.


setting up smsf

Benefits of Setting Up an SMSF

Here are some advantages of establishing your own SMSF.

  • Greater choice of investments
  • Ability to invest directly in property
  • Maximise tax benefits
  • More control and flexibility of your retirement funds – you choose where and who assets go to
  • Claim tax deductions for life insurance
  • Potential higher net returns
  • Ability to draw-down a tax-free pension once you reach retirement age
  • Ability to increase your super balance through contribution strategies
  • Allows for flexible estate planning
  • strategies upon death
  • Insurance Premiums paid by the fund
  • Flexibility with transitioning to retirement options
  • Members of your family can participate in the fund

Things to consider before you set up an SMSF

There are some issues and risks you have to be aware of when setting up an SMSF. These include:

How Much Time Does SMSF Take to Manage?

Consider whether you have the time. As a trustee, you will have to set aside your time for the ongoing management of the SMSF. Alternatively you can hire a financial planner or an SMSF accountant to do this for you.

How much money does it take to set up an SMSF?

Costs associated with an SMSF are potentially greater for account balances less than $200.000 as compared to other funds.

What are the obligations of an SMSF Trustee?

If you are a Trustee of the SMSF you are bound by law to responsibly manage the SMSF and are personally liable for any actions of the SMSF. You can delegate the tasks associated with administrating your SMSF but not the legal responsibility.

SMSF Accountants Melbourne

Our clients have the comfort of knowing that their fund is reviewed and managed by industry experts whose occupation is the professional management of SMSFs. Our SMSF accountants in Melbourne can:

  • Establish and setup of your SMSF Fund
  • Identify tax strategies for maximum benefits
  • Assist with investment strategies and property investment advice
  • Keep track of the day to day transactions
  • Manage administration, accounting and annual compliance obligations
  • Prepare audits and tax returns
  • Monitor the latest tax strategies to ensure we deliver the most up to date ideas on a continuous basis
  • Keep you up-to-date with quarterly reporting
  • Consider your insurance needs

Contact Wilson Pateras for further information about setting up an SMSF

Wilson Pateras are award-winning SMSF advisors. If you want to know more about SMSF setup, please book in your complimentary consultation here.

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