How to Set Up an SMSF

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There’s a lot to do when setting up a self managed super fund properly. Here is a simple guide so that you leave no stone unturned when taking control of your SMSF.

Obtaining a Trust Deed

A trust deed is a legal document that outlines the rules for establishing and operating your fund. Together with the superannuation laws, this forms the funds governing rules and should detail the following information:

o The powers, duties and responsibilities of the funds trustees

o The rights of the members who belong to the fund (no more than four members are allowed on one SMSF)

o The fund’s objectives

o Who the trustees are

o Who can be a trustee

o How trustees are appointed or removed from the fund

o Who can be a member

o When contributions can be made to the self managed super fund

o How and when benefits can be paid (either via pension or a lump sum) within the SISA requirements

o How to appoint professional advisers, such as an auditor

o The procedures for winding up or closing the fund

This is such an important document as it will guide and protect members and their nest egg. It is best to have this document drawn up by a professional such as a lawyer (alternatively if you are confident in doing it yourself you can purchase a deed kit).

Appointing Trustees

New funds usually appoint trustees under the fund’s trust deed. Don’t forget that for your fund to be an SMSF, all members of the fund need to be trustees or directors of the company you have nominated. All trustees must consent in writing to being appointed to the SMSF and you’ll need to hold onto these records for a minimum of 10 years.

Signing a Trustee Declaration

Within 21 days of becoming a new trustee (or the director of a corporate trustee) you’ll need to ensure you’ve signed a declaration stating this has occurred. By signing this document, you are acknowledging your responsibilities and duties as a trustee of the fund. You should keep the declaration for as long as it’s relevant and must be available for review when the fund is being audited.

Electing the fund to become regulated

Once you’ve completed all the required documentation and signed on all the relevant trustees, you’ll then need to register the fund with the Australian Tax Office within 60 days of its establishment. You’ll also need to apply for an Australian Business Number and Tax File Number for the fund itself.

Finally, you’ll need to open up a bank account in your SMSF’s name. This allows you to manage the fund’s operations and accept cash contributions and rollovers from super benefits.

SMSF Set up take control and establish your own SMSF today.

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