,V\RXU606)VHWXSFRUUHFWO\" How to set up an SMSF Step 1: How many members? Self-managed super funds (SMSFs) can have up to four members. Each member of the fund must also be a trustee, or if a corporate trustee is appointed, a director of the corporate trustee. Trustees manage the fund, while members receive the benefits. Do you need financial advice? Call us on 1300-794-893 to find out how Switzer Financial Planning can help you. Step 2: Choose a trust structure An SMSF is a type of trust, with trustees. You have two choices: each individual member can be a trustee; or you can create a company (corporate) to be the trustee. A fund with individual trustees is cheaper to establish, however a corporate trustee structure makes it easier to record title to investment assets and may also assist if your fund is looking to borrow money to invest. We generally recommend the corporate trustee structure. If you choose a corporate trustee, you’ll need to decide on a company name and register it with ASIC. You and any other members will be the company’s directors and its sole purpose will be to run the fund. ASIC will charge an upfront company registration fee of $440, and then a small annual ongoing fee of $42. If you are the only member (single member SMSF), then you can be the sole director of the corporate trustee. If you choose the individual trustee path and you are the only member, you will need to find another person to be a trustee. This person can be related to you, but they can’t be your employer (unless they are related to you). Step 3: Get a trust deed The trust deed sets out the rules for your fund. The deed should be prepared by a qualified legal practitioner and signed and dated by you and any other trustee. Most administrators and other specialist companies can also help with this step. Step 4: Sign a trustee declaration The law requires each trustee to sign a trustee declaration to show they understand their responsibilities. This must be done within 21 days of becoming an SMSF trustee or a director of an SMSF corporate trustee. The document must be kept for at least 10 years. You can get the form from the Australian Taxation Office. Switzer Super Service can take care of your DIY super fund’s paperwork and accounts. Call us on 1300-794-893 for details Need help getting a trust deed? Search the Service Providers directory at www.switzersuperreport.com.au Step 5: Elect for the fund to be regulated You must elect for the fund to be regulated within 60 days of set-up. This notice is non-revocable and advises the ATO that the fund will be eligible for tax benefits. This step also involves getting: • A Tax File Number (TFN) for your fund; • An Australian Business Number (ABN); • Registered for GST (optional and not required by most funds). Step 6: Nominate members and record each member’s TFN You need to nominate yourself to be a member of the fund and your application needs to be approved by each trustee. The trustees must also obtain and record tax file numbers for each member. Step 7: Open a bank account Your SMSF will need a bank account to accept contributions, rollovers of super benefits and investment earnings. The fund’s assets must be kept separate from your personal assets. Step 8: Create an investment strategy You need to agree on an investment strategy that takes the needs of all members into account. Think of things like the fund’s investment objectives, how much risk you would like to take, how much income you need, the type of assets you would like to invest in, diversification and liquidity. Write it down and keep a copy of it. Step 9: Choose your service providers You’re likely going to need the help of an accountant, possibly a lawyer, and most definitely an auditor. Instead of an accountant, you may like to appoint a specialists SMSF administrator to take care of record keeping, member statements, financial accounts and the fund’s annual return. You may also need a valuer to assess niche assets, and potentially, a financial adviser. The Switzer Super Report website has a comprehensive directory of service providers. Step 10: Appoint an auditor You can do everything in Step 9 yourself except carry out your own audit, so you will need to appoint an independent auditor that is approved by a professional body such as CPA Australia, The National Institute of Accountants or The Institute of Chartered Accountants. You need to appoint an auditor at least 30 days before the due date of the SMSF’s annual return and you can’t lodge the annual return with the ATO without completing the audit. Stay up-to-date with the latest investment advice for SMSFs with a 21-day FREE TRIAL of the Switzer Super Report, a newsletter and website for DIY super trustees. Visit www.switzersuperreport.com.au Peter Switzer Leading financial commentator and founder of Switzer Super Report