by Olivia Long
So you’ve decided to establish an SMSF.
Prior to establishing your SMSF, I recommend you consider whether you would prefer to work with an SMSF Administrator or your Accountant.
Most Accountants offer your traditional year-end style tax service where you are very much reliant on tracking contribution and pension figures manually yourself during the financial year. A good SMSF Administrator will provide you with online access to reports that give you this information daily (making it far easier for you to monitor).
Do your research because there are a number of SMSF Administrators providing free fund establishment. The process is highly systematised and it should be a quick and simple process.
Step 1 – Determine your trustee structure
Keep in mind each member in the fund must also be a trustee. You can choose from an individual trustee structure or a corporate trustee structure. If you select a corporate trustee, incorporate the company prior to establishing your SMSF.
Step 2 – Your SMSF Paperwork
Your establishment kit should contain:
Step 3 – Rollovers and Contributions
Once you obtain your new SMSF ABN, contact your existing superannuation provider and request rollover forms. Complete these forms to facilitate the transfer of your superannuation money from your existing provider to your new SMSF bank account.
Alternatively, if you are ready to make in-specie contributions of assets and/or cash, you’re ready to go.
Step 4 – Investment Strategy
Have you finalised your fund’s investment strategy? Important items to consider when formulating your strategy are:
Step 5 – Implementation of strategy
Now that your fund is established and you’ve considered your investment strategy, it’s time to start investing.
The establishment process can take you up to 30 days as the ATO take anywhere from 7 – 28 days to provide the SMSF’s ABN number. One helpful hint – review the insurance cover you have with your existing super fund provider before rolling all of your super monies into your new SMSF. An SMSF can hold an insurance policy on your behalf but you most likely won’t be able to take the policy with you from your previous provider. You will need to establish a new policy. You don’t want to be stuck with no insurance cover!
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