Six Steps to Setting up an SMSF

Want to know some practical, easy steps to setting up an SMSF?

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An SMSF is essentially a trust which is set up with its own Australian business number (ABN) and tax file number (TFN). It is very important that an SMSF is set up properly and with the assistance of the right professionals.

Some of the key steps required to setting up an SMSF are as follows:

  1. Appoint a trustee – a trustee can be either an individual or a company. All fund members must be either trustees, or directors of the trustee company.
  2. Create a trust deed – this is a legal document which sets out the rules of the SMSF. These rules are in addition to the rules contained in the SIS Act and include matters such as trustee powers, allowable investments, payment of benefits, changing trustees and members. As trustee of your SMSF, you must comply with all the requirements contained within the trust deed.
  3. Record members’ TFNs
  4. Apply for an ABN, TFN and register the fund with the ATO
  5. Open a bank account – it is essential that this be a separate bank account from your personal account. An SMSF is to be maintained solely for a member’s retirement benefits (or to pay a benefit upon a member’s death). It should not be used or tied in with members’ personal financial arrangements.
  6. Prepare an investment strategy – this should have regard to all of the circumstances of the fund including risk and return, diversification, liquidity and liabilities. The investment strategy should also consider insurance needs of members.

Establishing and managing an SMSF requires the help of a variety of professionals which includes a financial planner, lawyer and accountant:

  • An accountant is typically concerned with the tax, administration and compliance aspects of the fund;
  • A Financial Planner is concerned with the investment and performance aspects of the fund; and
  • A lawyer is involved in the legalities, drafting the trust deed and the estate planning aspects of the fund.

All three of these areas are required to ensure the fund is compliant, operates effectively and that the fund’s key benefits are fully utilised.

Our Complete SMSF Solution

At Forty Seven, our point of difference is that we can offer a complete, integrated financial planning, accounting and legal solution for the set up and ongoing management of an SMSF under one roof!

Our Complete SMSF Solution sets us apart. Having all these professionals under one roof means that we are all able to meet with you to plan out the objectives, strategies and direction of the fund from all these perspectives. Our dedicated professionals will help ensure that all aspects of your fund are aligned towards a common goal to maximise this outcome.