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5 Easy Steps to Setup your Own SMSF

5 Easy Steps to Setup your Own SMSF

We have already discussed on the pros and cons of people setting up their own SMSF. If you have convinced yourself to set up your SMSF on your own, worry not help is at hand. Read on to know the easy 5 steps to setup your own SMSF.

Amass your TEAM:

Unless you are someone who is well versed in investing, law, financial planning, and in SMSF you are going to need help from some SMSF experts. Amass your team. You will need a financial planner, strategic investment planner, and an accountant. Ensure to ask the toughest questions when you choose the right candidate to work for you. Check their fee structure, and their certifications. Take a second opinion.

Appoint your trustees
One SMSF can have up to a minimum of 4 trustees. Choosing between being a sole trustee and having trustees along with you is totally up to you.  But according to the law no close relative can be a trustee of your SMSF. The trustee should be over 18 years and should have a good character.

It is the duty of the trustees to ensure that the fund is managed properly and is in compliance with the SMSF and tax laws. Other duties of the trustees include:

  1. Making sure that SMSF funds are not used for any personal benefits until retirement
  2. Reviewing the SMSF regularly and updating it according to the investment strategy

If need be, trustees can also hire personnel to execute various operations like

  1. Investment of the fund’s assets
  2. Maintenance of member information like personal details and bank accounts
  3. Preparation of regulatory reports, financial reports, and audits
  4. Budget planning and the payment of the cost and bills according to him.

Attain trust deed
Once your trustees have been finalized, you’ll have to sign declaration and have the trust deed ready. The deed is an evidence of the existence of the trust and also sets out the rules to be followed to operate the fund. You need to ensure that your declaration is in the format as required, dated clearly, and must contain the signatures of all the trustees.

Below are the aspects to be included:

  1. Details of the trustees
  2. Ways to appoint or remove trustees
  3. The trustee powers
  4. Membership eligibility
  5. Conditions regarding contributions acceptance
  6. Conditions on benefit payments to the members
  7. Terms related to winding up of funds.

Register the SMSF with Australian Taxation Office
Once the trust is established legally and the declaration is signed, you need to register your SMSF with the Australian Taxation Office in order to be recognized. You will have to acquire ABN (Australian Business Number) and TFN (Tax File Number) as well. If the turnover of your SMSF is over $75,000 you must register for GST within days of fund establishment.

Open a bank account dedicated to your SMSF
In order to avoid all the confusions, it always pays to open a separate bank account for your SMSF. This will help you maintain your personal accounts and super accounts separately, so you will not be confused and account keeping will be much easier.

For more details feel free to call us @ +61 3 9034 9709

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