Setting up your self-managed super fund can be a daunting process; you want to ensure you are covering all legal requirements throughout the process.
The Australian Taxation Office has outlined steps to take when setting up your SMSF to ensure you are eligible for tax concessions, able to receive contributions and looked after if a trustee is unable or decides they no longer wish to be the active trustee.
When setting up your SMSF, you ought to consider the following:
- Whether you wish to appoint a professional financial advisor to help you. If you do not have any experience with super regulations, this is a wise approach. Laws and regulations are constantly changing, and it is safest to work with someone who knows what they are doing.
- Decide whether to have individual trustees or a corporate trustee. Generally, a corporate trustee structure often costs more money to set up but removes individual liability as the SMSF acts under the company’s name.
- Ensuring all SMSF members sign a trustee declaration within 21 days of becoming a trustee or director of the corporate trustee.
- Tax File Number (TFN) and an Australian Business Number (ABN). You will then need to provide the ATO with each members’ TFN so that they can receive appropriate tax concessions.
- Ensuring a trust deed is created and is a legally-recognised document signed by all SMSF members. The trust deed needs to discuss how to establish and operate the fund.
- Fund must be registered with the ATO. You should also elect the fund to be regulated by the ATO.
- Set up a bank account for the SMSF and an electronic service address.
- Prepare an exit strategy. This should include details pertaining to the process for appointing an individual as an enduring power of attorney.
Should you follow all of these steps, the SMSF you are setting up will be compliant with SMSF regulations. Once these aspects are considered, you need to make sure all SMSF trustees are compliant with super and tax laws. These laws are often being updated, so staying educated on current compliance issues is paramount to the success of the SMSF.
