SMSF Frequently Asked Questions
- What is a SMSF?
- Is a SMSF suitable for me?
- How long does it take to set up a SMSF?
- What funds are used to create a SMSF?
- Who can be a trustee of a SMSF?
- How many members can be included in a SMSF?
- Can employer contributions be included in my SMSF?
- Can the fund provide insurance?
- What are the ongoing costs of a SMSF?
Q. What is a SMSF?
A SMSF is a small superannuation fund, where control is kept in the hands of the members. The members decide how the fund will operate and what investments the fund will invest in.
Q. Is a SMSF suitable for me?
There are certain regulatory responsibilities placed on trustees of SMSF, therefore when setting up a fund it is important to consider various issues including:
- Will I have the time to manage and administer the SMSF?
- Will there be sufficient funds in the SMSF to make the administrative costs worthwhile?
- Will the other trustees of the fund be suitable co-investors?
Q. How long does it take to set up a SMSF?
Once your signed application is received by Wealth Within, it generally takes around 1 week to establish a new fund.
Q. What funds are used to create a SMSF?
There are 3 ways of transferring money or assets into a fund:
- make a contribution to the fund
- roll over existing superannuation benefits into the fund
- purchase assets by the trustee of the fund
Another benefit of a SMSF is the ability to consolidate your superannuation (particularly if you have a range of super funds). Consolidating your funds can save on the high fees you pay for managed funds to manage your money.
Q. Who can be a trustee of a SMSF?
The trustee can be either an individual or a trustee company. Individual trustees are generally the most common. Where the individual option is chosen every member must also be a trustee. A fund cannot have a sole individual as a trustee, there must be more than one person as trustee if the individual option is chosen. To overcome this, a single member fund can appoint a second trustee provided the member is one of the trustees and the member is not an employee of the other trustee (unless they are relatives) or they can appoint a company as trustee. Where a trustee company is appointed, all members must be directors of the trustee company.
Q. How many members can be included in a SMSF?
A SMSF cannot have more than 4 members and all members must be Trustees of the fund. Therefore, you have a choice as to who becomes a member of the fund which may include your partner, members of your family, a business partner or friends. This means that the super balances of each member can be consolidated into SMSF.
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Q. Can employer contributions be included in my SMSF?
Yes. With the introduction of superannuation choice, you can instruct your employer to pay your superannuation contributions into your SMSF.
Q. Can the fund provide insurance?
Yes, with a SMSF you can organise life and total and permanent disablement cover to insure the members of the fund. The SMSF pays the cost of the insurance and claims it as a tax deduction, which makes the costs of insurance more tax effective.
We can assist you in selecting the best insurance options for your SMSF.
Note: Your existing superannuation fund may already include insurance cover. It is recommended, before setting up a SMSF, that you seek independent advice about the insurance consequences of transferring your superannuation from your current superannuation scheme.
Q. What are the ongoing costs of a SMSF?
This is an optional service we provide for our clients. We are not directly involved in the preparation of accounts or the auditing process - this service is outsourced to a specialised professional accounting firm. Compliance fees are paid by the fund and start from $770 (Inc GST). A full list of the fees is outlined below.
|Description||Cost (Inc GST)|
|Base Administration Charge* (Accounting and Taxation)||$770|
|Audit Fee (Basic Fund)||$440|
|Additional Investment||$66 per investment|
|Real Estate Property||$330 per property|
|Additional Members||$165 per member|
|Pension Fee||$165 per pension|
|Existing Fund Takeover (Once off charge)||$330 per fund|
*Base Administration Charge covers up to two members and up to 10 investments held during the year and includes:
- Preparation of financial statements
- Preparation and lodgement of income tax and regulatory return
- Preparation and lodgement of superannuation surcharge statements
- Preparation of member's statements