Setting up a self managed super fund involves five major steps that are necessary for the entire process. Once these five steps have been accomplished, your self managed super fund will be established and ready to start growing your retirement funds.
Step 1 – Establishing the Self Managed Super Fund
The very first step is to establish the self managed super fund. You should have an intention for the fund to provide retirement benefits, know who the other members are, and know which of you will be appointed trustees. All of your beneficiaries should be identified and you should have assets to store in the fund or to use for investment purposes.
Step 2 – Readying and Finalising the Trust Deed
The wise choice is to have a professional legal expert who knows the laws revolving around a self managed super fund draw up your trust deed. This is the legal document that stipulates the rules and conditions of your self managed super fund, so it is crucial that it is done correctly and designed to have yours and the other members’ best interests at heart. It should outline your flexibility and maximise on your control of the self managed super fund. Included in the deed should be the investment strategies you will use to aim for your goals, any conditions that will need to be met to change any details in the future, how each of you will be credited, and how the pensions will be paid out.
Step 3 – Trustees Must Sign the Declaration
All appointed trustees must sign a declaration to ensure they understand their roles and will operate honestly, with care, and take their responsibilities seriously. Signing the declaration needs to be done within 21 days of you and the other appointed members becoming trustees. The declaration can be obtained from the ATO, who look upon the signed document as proof of the self managed super fund’s trustee’s compliance with the necessary conditions. You should hold onto the declaration for about ten years in case the ATO requests to see it.
Step 4 – Registering the Trust with the ATO
Within 60 days from establishing the self managed super fund, it should be registered with the ATO. An ABN and a TFN should be applied for too at this time. Registering the trust will ensure its compliance and deem it eligible for tax concessions that are not available for non-compliant self managed super funds.
Step 5 – Opening the Trust’s Bank Account
Your self managed super fund must hold a bank account in its name. You must then use this account to make any payments such as tax, member benefits, and operational and administrative costs, as well as paying fees to any specialists used to assist with any aspect of your self managed super fund. The bank account is also available for the self managed super fund to receive payments, such as contributions and earnings from investments.