Home » Setting up a Self-Managed Super Fund

Written by: Angela Frecklington, Senior Accountant

Are you contemplating the idea of setting up a Self-Managed Superannuation Fund (SMSF)?

An SMSF is for the sole purpose of providing retirement benefits to its members. Many people want the flexibility to choose and manage their retirement investments themselves. The Structure of an SMSF is important to think through and get right from the start.


Investment Strategy

Creating a comprehensive investment strategy is essential in the initial stages of setting up an SMSF. You must consider allocations for cash, Australian shares, international shares, managed funds, commercial and residential property, as well as gold, silver, and collectibles.

It is crucial to note that these assets cannot be used for personal purposes.  All Assets are solely for retirement and are to be arm’s length transactions. Commercial property can be transferred from a member to an SMSF at Commercial Rates, residential property cannot.


Structure and Trustees

The structure of your SMSF is crucial and requires careful consideration. With a limit of 6 members, you can opt for either individual trustees or a corporate trustee.

Individual Trustees:

If you choose individual trustees, a minimum of 2 trustees is required, both being fund members.

In the case of a sole fund member, that member must also be a trustee.

Corporate Trustee:

If you opt for a corporate trustee, each fund member must be a director of the corporate trustee.

Even with a single member, at least 1 director is necessary, who must also be a fund member.

In choosing a corporate trustee, it will be a Special Purpose Company, administered by ASIC, with a lower annual review fee but requiring a Director ID. All members must serve as either trustees or directors.


Advantages and Disadvantages of Trusteeship:

Individual Trustees:

Inexpensive and easy to set up and use.

Disadvantage: Changing trustees can be a costly and time-consuming process, requiring the alteration of titles for all SMSF assets.

Corporate Trustees:

Simplifies recording and registering assets, especially for changes in membership.

Titles of SMSF assets remain unchanged during changes in membership.

Disadvantages include ASIC regulation requirements and higher setup costs.



SMSF Borrowing

While an SMSF cannot borrow directly, a Bare Trust or Custodian Trust, coupled with a corporate trustee, can enable Limited Recourse Borrowing. This process can be costly and challenging to navigate, with varying deposit requirements from lenders.


Our team of experienced Accountants is here to assist you with the set-up of your Self-Managed Superannuation Fund. Call us today to book an appointment.


The information contained in this article is for general informational purposes only and is not intended to provide legal advice or substitute for the advice of a professional. This information does not consider your personal circumstances and may not reflect the most current legal developments. Should you need advice, please contact our firm for targeted information relating to personal your situation.