How do I set up a self-managed super fund (SMSF)?

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How do I set up a self-managed super fund (SMSF)?

Setting up a self-managed super fund (SMSF) in Australia involves several steps:

  1. Meet the eligibility criteria: To set up an SMSF, you must have no more than six members, each of whom must be a trustee or a director of the trustee company of the fund. You must also be able to demonstrate that you have the knowledge and skills to manage the fund.
  2. Choose a trustee structure: You can choose to have an individual trustee structure or a corporate trustee structure. If you choose the corporate trustee structure, you will need to incorporate a company and appoint directors as trustees.
  3. Obtain an Australian Business Number (ABN) and Tax File Number (TFN): Your SMSF will need to have its own ABN and TFN. You can apply for these through the Australian Business Register and the Australian Taxation Office, respectively.
  4. Register the fund with the Australian Taxation Office (ATO): You will need to register the fund with the ATO and obtain a super fund registration number.
  5. Create a trust deed: A trust deed is a legal document that sets out the rules and regulations for the operation of your SMSF. A trust deed must be in place before you can accept any contributions or rollovers into the fund.
  6. Appoint an auditor: All SMSFs are required to appoint an approved SMSF auditor to audit the fund’s financial statements each year.
  7. Comply with investment and operational rules: SMSF’s are subject to strict investment and operational rules, including diversification requirements, in-house asset rules, and related party transaction rules. It’s important to understand and comply with these rules to ensure your SMSF remains compliant.

It is recommended to seek professional advice from accountant, lawyer, and financial advisor before setting up an SMSF to ensure that you understand the responsibilities and obligations that come with running an SMSF, and to make sure that it is the right strategy for your retirement savings.

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