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How can I have my own SMSF?

When establishing a Self Managed Super Fund, the legislation requires a decision be made on the type of trustee, either individual or corporate, and different penalty regimes apply to each. Whilst higher penalties may be levied on corporate trustees, they are generally considered advantageous to individual trustee arrangement for reasons including:

 

  • You can have a single director company as trustee for a single member SMSF (otherwise you need two individuals as trustee which means getting someone else involved in the fund’s affairs)

  • It is easier to add/remove members as you only need to change the company director details (instead of changing the name in which all fund investments are held to recognise the new or revised individual trustees)

  • Limited liability applies to companies so that the members have greater protection of their personal assets if someone sues the trustee for damages

  • Greater control over their fund’s succession plan as their will can contain provisions dealing with their share in the corporate trustee and the effect it has on who controls the company

 

Whilst a corporate trustee is generally regarded as more advantageous, you can have individuals act as trustee of the SMSF. For individual trustees, the legislation allows the following:

 

  • All members must also act as trustees

  • For single member funds, an additional trustee may be appointed that is not a member

  • Is a member of the fund being under the age of 18 they cannot act as trustee? In this case a parent or guardian must be appointed as trustee of the SMSF

 

As a guide the following should be considered when establishing an SMSF:

 

  • Are any of the persons who want to be in the SMSF disqualified persons

    • If so, do they qualify to request a waiver of their disqualified status

  • Are any of the persons who want to be in the SMSF intending to go overseas indefinitely in the future

  • Are all of the persons suitable for an SMSF? 

  • Can all the persons be in the same SMSF?

  • Should they act as individual trustees or appoint a corporate trustee?

  • Have you considered the operational practicality of the trustee and fund names chosen? 

  • Does each person have arrangements in place in case of mental incapacity or other circumstances affecting their ability to act as a trustee/trustee director?

 

The following documentation and applications need to be created and executed to establish an SMSF:

 

  • SMSF Trust Deed

  • Member application forms

  • Trustee consent to act forms

  • ATO Trustee Declaration

  • Notification in relation to death benefits

  • Tax file number (TFN) and Australian Business Number (ABN) – link to article on when this can occur

  • SMSF Investment Strategy

Find out how Lifetime SMSF helps clients manage their Self Managed Super Funds here

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The information contained in this website is purely factual in nature and does not take account of your personal objectives, situation, or needs. The information is objectively ascertainable and, therefore, does not constitute financial product advice. It is not intended to be financial product advice, legal advice, or tax advice and should not be relied upon as such. It is provided for the use of a Self-Managed Superannuation Fund Trustee or a person who has already made the decision to establish a Self-Managed Superannuation Fund only. In no circumstances, is it to be used by a person for the purposes of making a decision about establishing a Self- Managed Superannuation Fund. Lifetime SMSF Pty Ltd is not licensed to provide financial product advice under the Corporations Act 2001. If you require personal advice you should consult an appropriately licensed or authorised financial adviser. Liability limited by a Scheme approved under the Professional Standards Legislation.

CONTACT US

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P.O. Box 4301, Bay Village, NSW, 2261

1300 031 943

admin@lifetimesmsf.com.au

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