Your SMSF needs to be set up correctly so that it’s eligible for tax concessions, can pay benefits and is as easy as possible to administer. The main test is your fund must be run for the sole purpose of providing retirement benefits for the members.
Your SMSF can be run either through individual trustee or corporate trustee. A trustee is responsible for running the fund and acting in the best interests of the members. As a trustee you need to manage the fund and its investments separately from your own affairs.
The trustee is responsible for running the fund according to its trust deed and the super laws. If you don’t, the tax concessions that normally apply to your super may be affected and you may face penalties.
Here are the steps to setting up your fund:
1. Appoint an SMSF professional to help you set up and run your fund
2. Work out the structure of your fund (individual trustee or corporate trustee)
3. Make sure you (and the other members) are eligible to be a trustee
4. Check the residency of your fund
5. Create your trust and trust deed
6. Appoint your trustees
7. Record each member’s tax file number
8. Open a bank account for your fund
9. Register with the ATO
10. Prepare an investment strategy.