Typically, the steps involved in setting up a Self-Managed Superannuation Fund (SMSF) include:
- Obtaining a trust deed.
- Appointing trustees.
- Each trustee signing a consent to act as a trustee.
- Each trustee signing the ATO Trustee Declaration.
- Electing to become a regulated fund.
- Obtaining a Tax File Number (TFN)
- Obtaining an Australian Business Number (ABN).
- Establishing a separate bank account for the SMSF.
- Preparing and implementing an Investment Strategy for the Fund.
Bselfmanaged’s establishment service simplifies the process and ensures that all steps are covered effectively and efficiently.
Obtaining a trust deed
A SMSF trust deed must be prepared to establish the operating rules for the Fund. The trust deed is essentially the “rule book” that the Fund follows.
Our standard SMSF Trust Deed effectively allows your SMSF to do anything allowed by Superannuation Legislation.
Appointing trustees
All superannuation funds must appoint trustees. Trustees are responsible for ensuring the fund is properly managed and that it complies with all rules and legal obligations. The trustees are essentially the “umpires” who ensure that the Fund operates according to the “rule book”
All SMSF members must be appointed as trustees or directors of a corporate trustee of the fund and all trustees must consent in writing to their appointment as trustee.
Bselfmanaged will advise whether an individual or corporate trustee is best for you.
Signing a trustee declaration
All new SMSF trustees (and directors of corporate trustees) must sign an ATO Declaration confirming that they are aware of their duties and responsibilities within 21 days of becoming a trustee or a director of a corporate trustee.
As a trustee, the ATO expects you to:
- act in the best interests of all fund members when you make decisions
- manage the fund separately from your own affairs
- ensure the money in the fund is only accessed where the law allows it
- know, understand and meet your responsibilities and obligations
- ensure your SMSF is independently audited every year
- lodge your SMSF annual return every financial year
- pay the supervisory levy.
Electing to become a regulated fund
Trustees must elect to be ‘regulated’ under SISA to receive concessional tax treatment within 60 days of establishing an SMSF. This can be done online or by submitting a paper form to the ATO.
Obtaining a Tax File Number (TFN)
Trustees must obtain a TFN for the SMSF. This can be done online or by submitting a paper form to the ATO.
Obtaining an Australian Business Number (ABN)
The Australian business number (ABN) is the identification system for all business-to-government dealings. An ABN can be obtained online or by submitting a paper form to the ATO.
Separate bank accounts
A separate bank account must be established for your SMSF to ensure that money belonging to the SMSF is held separate to those of the members, trustees and related employers.
This is a SISA requirement but also helps SMSF trustees to preserve and protect their retirement income.
We help clients establish a separate bank account for each new SMSF. Generally, the main operating account established by Dixon Advisory is a Macquarie Cash Management Account.
SMSF investment strategy
SMSF trustees must prepare and implement an investment strategy for their SMSF, and regularly review that investment strategy. This helps trustees to make the best possible investment decisions for their SMSF.
The SMSF investment strategy must reflect the purpose of the fund and consider:
- investing to provide sufficient member returns, taking into account investment risk
- appropriate diversification and the benefits of investing across asset classes (for example, shares, property, fixed interest) in a long-term investment strategy
- the ability of the SMSF to pay benefits as members retire and to pay other costs incurred by the SMSF, and
- the age, income, employment and retirement needs of the SMSF’s members.
All investment decisions must be made according to the SMSF’s investment strategy.