Establishment costs deductibility

The SMSF formation costs are in capital nature and can not be claimed as an expense deduction.  ATO’s view is that a SMSF is not a business entity therefore the costs can not be amortized.

Therefore, SMSF establishment costs, such as costs of trust deed, formation of corporate trustee can not be expensed. These costs need to be written off in the first year of SMSF operation and should not be capitalized and carried forward.

iCare Super current setup costs are as below:

• trust deed: Free
• corporation trustee formation: $880

However the deed update costs can be claimed as deductions.

How can I pay setup costs for the corporate trustee structure setup costs to iCare Super?

Once we receive your request to set up the corporate trustee structure, we will email you an invoice for $880 and you will need to pay this setup costs upfront from your personal bank accounts.

Can I reimburse myself from my SMSF for the setup costs?

Yes, you can. You can transfer $880 from your SMSF bank account to your personal bank account once you have sufficient funds in your SMSF bank account.