Once you’ve decided an SMSF is right for you, it’s important to understand the steps involved in getting your SMSF established. We outline the 5 key steps below.
Before you can register an SMSF with the ATO, you need to establish a trust. A trust is required to have the following:
The trust deed sets out the rules and conditions under which the SMSF will operate, so it is vital to start with a well-drafted trust deed. It should be prepared by a qualified legal practitioner who understands superannuation law (and SMSFs in particular) and designed to give the trustees maximum control and flexibility. When the trust deed is found to be satisfactory, it should be executed by the trustee(s) according to the rules applying in their State.
The trust deed:
Provisions that could be contained within a trust deed
A trust deed for an SMSF could contain provisions that deal with the following:
Upon becoming a trustee or director of the corporate trustee of an SMSF, you are required to sign a declaration form stating that you understand your obligations, duties and responsibilities as a trustee or director of the corporate trustee of an SMSF. The declaration must be in the approved form (available from the ATO) and completed within 21 days of you becoming a trustee.
Your obligations and responsibilities as a trustee of an SMSF include:
You must keep your completed declaration for at least 10 years and make it available to the ATO if requested.
Within 60 days of the establishment of an SMSF, the trustees must lodge an election to be regulated with the ATO. This election is irrevocable and advises the ATO that the SMSF will be subject to the requirements of the relevant superannuation legislation and therefore will be entitled to concessional taxation treatment at the rate of 15% as a complying fund.
If an election notice is not lodged, the SMSF will not be treated as a complying fund for taxation purposes and the SMSF will be taxed at the highest marginal tax rate.
The trustee of an SMSF will generally need to set up a cash account so the Fund can accept contributions, rollovers and earnings from investments. This account will also be required to pay expenses such as annual supervisory levy, accounting fees, taxation liabilities and importantly, member benefits.
SOURCE, All rights reserved to – BT Financial Group, © BT Financial Group 5 steps to setup a self managed superannuation fund (SMSF), https://www.bt.com.au/personal/superannuation/learn/understanding-smsfs/5-steps-to-setup-a-self-managed-super-fund.html
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