I want to setup a new Self-Managed Superannuation Fund (SMSF), so what do I need to do?

Establishing an SMSF is complicated and there are rules and regulations to obey before setting it up. To get an idea, please visit ATO's webpage Self-managed super funds | Australian Taxation Office (ato.gov.au). It has helpful videos and answers to common questions about SMSFs. 

Are you eligible to be a trustee/director of a Self-Managed Superannuation Fund? Please look at these questions:

1. Are you over 18 years old?
2. Have you ever been convicted of an offense involving dishonesty? Eg. caught shoplifting when you were 16 years old.
3. Have you ever been subject to a civil penalty order under the super laws?
4. Are you insolvent or bankrupt?
5. Have you ever been disqualified by a regulator? For example the ATO, APRA, ASIC, etc.

If you are eligible to be a trustee/director, then ask yourself these questions :

1. Am I organised and able to file away documents such as bank statements, share trading contracts and dividend statements safely?
2. Do I have enough experience in buying and selling shares or investments?
3. Am I good at following rules and regulations set out by the ATO?
4. Am I aware that I can not withdraw any monies from my super until I reach my "preservation age"?
5. Am I aware  that monies in the SMSF should be separated from personal monies?
6. Am I aware that the superfund is not allowed to "invest" is certain assets that could be used personally such as cars, boats, caravans and golf club memberships?
7. Am I aware that my SMSF needs to be audited every year?
8. Am I aware that as the trustee of my SMSF, I will be held responsible for any breaches in the rules and regulations?
9. If I am not sure of something such as how much I can contribute or what I can invest in, I will seek the help of my tax agent or financial adviser.

If you said yes to all these questions, then a Self Managed Superannuation Fund could work for you.

Please read these PDF documents from the Australian Taxation Office :

1. SETTING UP A SELF-MANAGED SUPER FUND (NAT 71923)
2. RUNNING A SELF-MANAGED SUPER FUND (NAT 11032)
3. SELF-MANAGED SUPER FUNDS - KEY MESSAGES FOR TRUSTEES (NAT 71128)
4. TRUSTEE DECLARATION (NAT 71089)

Then ask yourself, do you want individual trustees OR a corporate trustee for your SMSF? A corporate trustee means that a special purpose company will be the trustee of your SMSF. You and other members will become directors of the corporate trustee. A corporate trustee makes administration slightly easier when a member decides to leave the fund. It's just a transfer of shares. There is no need to update your bank or stockbroker about the change. Corporate trustee SMSFs are more expensive. An initial fee includes ASIC fee to establish a company. Many online SMSF trust deed companies offer these document/setup services. Followed by an on-going annual ASIC company renewal fee of $46. Plus Trust deed of $125 to $750 depending on the legal document provider/law firm.

With individuals as trustees of the SMSF, it could get messy if one member leaves. You need to notify the bank and authorities of the change in trustees. There is no additional cost for setting up SMSF with individual trustees. Trust deed costs $125 to $750 depending on the legal document provider/law firm.

The prices above are the basic cost of an SMSF trust deed.

Due to changes in the law from 1 July 2016, only licensed Financial Advisers are able to set-up SMSF for you. They will assess if an SMSF is a good investment strategy for you. Unlicensed accountants are not allowed to establish SMSFs.