SMSF establishment: what’s involved?
A self-managed superannuation fund (SMSF) is a private super fund regulated by the ATO. It can have up to six members, all of whom must be either individual trustees of the fund or directors of the corporate trustee. Establishing an SMSF involves several steps and ongoing obligations that should be understood before proceeding.
The first step is establishing the trust: an SMSF is a trust, so it requires a trust deed and a trustee. The trust deed sets out the rules governing the fund, including investment powers, contribution acceptance, pension payment provisions, and binding death benefit nomination procedures. The trustee can be either individual trustees (each member must be a trustee, and a single-member fund needs a second individual trustee) or a corporate trustee (a company established specifically for this purpose).
Once the trust deed is executed and the trustee is in place, the fund must be registered with the ATO. Registration involves applying for an ABN and TFN for the fund and electing to be regulated under the Superannuation Industry (Supervision) Act 1993. The ATO will issue a notice of compliance once the fund is registered.
After registration, the fund needs a dedicated bank account in the name of the trustee on behalf of the fund. All contributions, rollovers, and investment transactions must flow through this account. The fund also requires an investment strategy, which must be formulated and regularly reviewed by the trustees.
At CoSec Partners, SMSF establishment costs $429 including GST. This covers the SMSF trust deed (drafted and signed off by Key Legal, an independent external law firm) and all founding documentation. If a corporate trustee company is required, it is an additional $834 (combined package $1,263 including GST). We do not handle ATO registration, ongoing administration, or audit. These should be arranged through the member’s accountant or SMSF administrator.
Frequently asked questions
How long does it take to set up an SMSF?
The establishment documents, the deed, trustee company where required, consents, and minutes, can be prepared quickly. The longer step is ATO registration and the issue of the ABN and TFN, which is handled by the fund’s accountant or administrator and generally takes a few weeks.
What ongoing costs does an SMSF have?
Annual financial statements, an independent audit by an approved SMSF auditor, the annual return, and the ATO supervisory levy, plus the ASIC annual review fee where the fund has a corporate trustee. Those recurring costs are the main reason very small balances are often better served by an APRA-regulated fund.
Does CoSec Partners handle ATO registration and SMSF administration?
No. We prepare the establishment documents: the trust deed, drafted and signed off by Key Legal, an independent external law firm, the corporate trustee company where required, officer consents, and establishment minutes. ATO registration, ongoing administration, and the annual audit are arranged through the member’s accountant or SMSF administrator.
This article is general information only and does not constitute legal, financial, or tax advice. While we endeavour to keep content accurate and current, laws and regulations change frequently. For advice specific to your circumstances, please consult a qualified professional adviser. CoSec Partners Pty Ltd accepts no liability for actions taken based on this content.