Getting the fund started, what do I need to do?

As SMSF are trusts the fund must obtain a trust deed. The trust deed sets out the rules for establishing and operating the fund.

We will now look at the key components and terminology in managing a Self-Managed Super Fund (SMSF).

Trust Deed

As SMSF are trusts the fund must obtain a trust deed. The trust deed sets out the rules for establishing and operating the fund. The trust deed is a legal document. The trustee will be appointed as set out in the trust deed. All trustees, be it an individual or director of a corporate trustee, must consent in writing to be appointed. Next, we are talking about the fund assets.

Fund Assets

The trustee will hold the assets in trust for the benefit of the beneficiaries. It is important that the assets are correctly held either in the name of the individual trustees or corporate trustee; as trustee for the fund. Examples: for individuals, John Smith & Mary Smith as trustees for the Smith Family Super Fund. For a corporate trustee the correct wording is JSMS Pty Ltd as trustee for the Smith Family Super Fund.

Specifically, to manage the Fund’s operations and to accept cash contributions and rollovers, a bank account should be opened in the name of the Fund.

Trustee Declaration

The Australian Taxation Office Self-managed super fund trustee declaration is required to be signed within 21 days of becoming a trustee, or director of a corporate trustee. By signing the trustee declaration, you declare that you understand your duties, and responsibilities as a trustee or director of the corporate trustee.

In signing the declaration, you declare that you understand the sole purpose of the Fund; this being that the Fund is maintained for the purpose of providing benefits to the members upon their retirement or their beneficiaries if a member dies.

After all, in making the declaration there is an understanding of investment restrictions that are imposed on a SMSF by law.

Further an understanding of the administrative duties of a trustee is also declared.

Registering the Fund

Once the trust deed has been executed in accordance with the relevant state laws, the fund is registered with the Australian Taxation Office (ATO) through the Australian Business Register (ABR). The ATO will conduct a risk assessment of a new registering SMSFs and the associated members. It is possible the ATO may contact trustees requesting documents such as, minutes from trustee minutes, copy of trust deed, details of any proposed rollovers and/or details of the investment strategy.

Upon registration the fund will receive a Tax File Number (TFN) and Australian Business Number (ABN). When the ABN is allocated, some of the fund’s details will be placed on the ABR and Super Fund Lookup (SFLU) register.

Once the risk assessment has been completed all the details will available on SFLU for other super funds confirm that the fund is eligible to receive transfers.

If applicable, the fund is able to register for GST during the registration. As part of the registration application with the ABR, the election to be a regulated superannuation fund is made. By electing to be a regulated fund, the fund will complying and received tax concessions.

Electronic Service Address (ESA)

An ESA enables your fund to receive employers’ super contributions, to process rollovers and to action release authorities in a more timely manner. Your ESA can be obtained from a SMSF messaging provider, through your SMSF administrator, tax agent or accountant.

Following the information provided on this website is general in nature. You should consider seeking independent financial advice from a licensed financial adviser if you are considering setting up a SMSF.

For further details, reach out to us.