How to set up a SMSF

How to set up an SMSF

The self-managed super fund (SMSF) is an option that many people are unaware of. It is a retirement savings account that allows you to manage your own assets in a self-managed super fund (SMSF). If you want more control over your retirement money, this could be a wonderful alternative for you. For those who are interested in how to set up an SMSF, this page outlines the necessary steps. The advantages and disadvantages of SMSFs will also be discussed, as well as ways to maximize your retirement funds. For those who are interested in forming an SMSF, stay reading!

How to set up a SMSF

What do I need to setup an SMSF?

You will need the following four things before you can establish your SMSF:

    • an Australian Business Number (ABN),
    • a Commonwealth tax file number (TFN),
    • an Australian company registration number (ACN), and
    • a plan on how you are going to manage your SMSF.

What is an ABN?

An Australian Business Number (ABN) is a unique number that identifies you as a business. You’ll need the ABN to operate your SMSF. You can register for an ABN through the Australian Business Register website.

What is a TFN?

A Commonwealth tax file number (TFN) is a unique number that the Australian Taxation Office (ATO) uses to identify you as an individual taxpayer. You’ll need your TFN if you want to set up and operate your own SMSF (see link for how and where to apply for a TFN).

What is an ACN?

Your firm is uniquely identified by its Australian company registration number (ACN). The website of the Australian Securities and Investments Commission (ASIC) is where you can apply for an ACN. ACN applications are processed within two days at the time of this writing, so don’t wait till your SMSF is up and running before applying!

What should be in a plan?

Your SMSF setup plan has a few constraints attached to it. First and foremost, your SMSF must be well-managed. It is necessary to reevaluate the strategy every three years or whenever your SMSF experiences major changes. Third, the strategy must allow for the distribution of SMSF income and gains. The Australian Taxation Office (ATO) provides a template plan.

What are the steps to take?

There are five main steps to take when establishing an SMSF:

    • Register as a self-managed super fund (SMSF). This needs to be done through the Australian Taxation Office (ATO) and you can start your application process with us here
    • Form an investment strategy. This will depend on your specific SMSF needs. You may want to consult a financial professional or speak with other people you know who have SMSFs who have similar goals as you.
    • Prepare the trust deed. A trust deed is a legal document that outlines the rules for your SMSF. Your trust deed must be in writing and retain a minimum of one original copy. This is taken care of for you through our application process. To start your application process with us click here
    • Obtain insurance cover to protect your fund from insolvency or bankruptcy.
    • Invest your assets. Once step four is completed, you can invest your assets in accordance with the investment strategy that was developed earlier. You will know about SMSF investment strategies from our SMSF online consultants.

How do I know which sector to invest my SMSF in?

This should be done in consultation with a financial advisor or an SMSF consultant. There are other considerations like liquidity, diversification and costs that need to be considered. There are many asset classes you can invest in such as cryptos like Bitcoin or Ethereum, property, local and international shares, metals like gold, artwork, classic cars, and more!

What are the pros of setting up an SMSF?

With an SMSF, you have complete control over your investments and are able to monitor their performance at any time. Another benefit is that you can route payouts from your SMSF to any Australian super fund or retirement account. Nontraditional asset classes like real estate and cryptocurrencies can also be accessed through this type of investment vehicle.

What are the cons of setting up an SMSF?

The main con is that you will need to make regular contributions to your fund. You may also have to pay capital gains tax when you sell investments within your SMSF.

What’s next?

At first, the process of setting up an SMSF may appear complicated. There are a number of ways you can get started if you don’t know where to begin, such as contacting a financial advisor or an SMSF consultant. You may take charge of your retirement savings and make the most of your self-managed super fund (SMSF) by establishing an SMSF.

If you need help setting up an SMSF or want to know more about how to save for retirement, why not check out our website at! We’ll show you several ways you can build a better future for yourself and your family. Or simply book a free consultation here.

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