How to Set up a Self Managed Super Fund

So you’re looking for more financial freedom; to use your super funds when and how you like? Then a Self Managed Super Fund (SMSF) is a viable solution. A SMSF is a private super fund that you manage. It provides control over your own super, better investment choice, significant tax concessions, insurance, and income in retirement, amongst other benefits.

The good news is, anyone can set up a SMSF. The bad news is, the process is involved, which is why you may want to give Grow Advisory Group a call. We specialise in all aspects of SMSF’s, including SMSF establishment and management.

To give you an idea of how to set up a Self Managed Super Fund, we have put together this guide.

Consider professional help

As mentioned above, setting up an SMFS is a complex process that requires various professionals in the setup and longterm management of a fund. Accountants, solicitors, fund administrators, financial advisors, auditors, and tax agents are just some of the professional required.

It’s a smart decision to get them involved from the get-go as your decisions in the startup may affect their capacity to assist you further down the track.

Choose individual or corporate trustees

The second step in how to set up a SMFS is to decide the fund structure. There are two options: Individual Trustees, which can support up to four people, or a Corporate Trustee, which is a company acting as a trustee for the fund.

The two fund structures differ in many respects. They have different costs, penalties, successions, requirements, and also differ in how the ownership of fund assets and separation of assets are managed.

If you are not sure which fund structure is right for you, contact Grow Advisory Group. We can discuss your requirements and help you set up your SMSF correctly.

Appoint trustees

Once you have established your fund structure, the next step in how to set up a SMSF is to appoint your trustees or directors.

Members must be individual trustees or directors of the corporate trustee. But, criteria must be met to become a member of a SMSF. The ATO’s website provides an eligibility checklist that is helpful for this step.

If criteria are met, trustees and directors must accept their appointment in writing and sign a Trustee declaration within the required 21-day period.

Create the trust and trust deed

With trustees appointed, the next step in how to set up a SMSF is to create the trust and the trust deed. A trust is an agreement where the trustee holds assets in trust for the beneficiaries. A trust deed is a legal document that outlines the establishing and operational rules of your fund.

To create a trust, you need trustees or directors, a trust deed, assets, and beneficiaries. A trust deed must be completed by a compliant party, such as Grow Advisory Group. All trustees must sign it, and it must be executed appropriately.

Register your fund

Now that you have established your fund, the next step in this how-to is to register it. You have 60-day to do so once it has been established.

To register your fund, it needs an ABN. You can check if your fund is eligible here. If eligible, you can then apply for an ABN online here.

Set up a bank account

With the SMSF registered for an ABN, you can then move on to the final set of setting up a SMSF, and that is to open a bank account in your SMSF’s name. The bank account will manage the operations and accept the contributions, rollovers of super and income from investments.

Conclusion

Anyone can set up a SMSF; however, it is a lengthy process and requires input from professionals.

Whether you need help creating the trust deed or setting up the entire trust, Grow Advisory Group can help. We specialise in SMSF’s and would only be too happy to assist in any way we can.

For more information on how to set up a Self Managed Super Fund, visit the ATO’s website or to have Grow Advisory Group set up your SMSF, simply give us a call.

Disclaimer: The information contained in this blog is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from an accountant and/or financial adviser.