It is possible to establish your own SMSF for FREE, yes absolutely NIL. You can download or write your own Trust Deed, apply for an ABN and TFN for your SMSF with the Tax Office and operate totally independently.

Superannuation Warehouse can do all this for you, or you can do it all yourself as well. We will show you exactly how to do it, step by step. All on you own, independently.

In the past many people have been ignorant towards Super as they saw Superannuation as wasted money, like a tax and not really theirs. As people’s Superannuation balances grow, they start taking it more seriously. And with compulsory Superannuation Contributions rising from 9% to 12% over the next few years, there is even a greater focus on Super and SMSF.

Firstly, there are various SMSF service providers trying to sell SMSF set-up services, with fees ranging widely. At the other extreme some companies will do it for free, but watch out for their catches. Some providers will also lock you in with a suite of providers e.g. banks and stock brokers. Providers with a Financial Services License (AFSL) generally get a kick-back from providers on interest and brokerage.  Be careful as this might cost you a lot in the long term. Superannuation Warehouse does not get any kick-backs from any providers and you are free to use the best providers for your needs.

Also look out that the Trust Deed does not link you to a specific broker or specific bank accounts. As Trustees of a SMSF you want the flexibility to move to different types of investments and service providers as your needs change. The choice if you use an administrator like Superannuation Warehouse or do it all yourself will depend on how comfortable you are in dealing with financial and legal arrangements. The fact you are reading this means you have an interest in your retirement future, and that’s a good thing.

Accountants will generally charge around $1,000 to establish a SMSF for you. The annual fees range from $650 to $5,000 for the accounting, audit, compliance and audit functions. See this comparison table for various provider offerings and costs.

Now, here’s the steps to do it all yourself, with no obligation towards Superannuation Warehouse. Feel free to use these documents and download it for FREE. It you consider using a quality service provider, please consider Superannuation Warehouse.

1. Trust Deed

The ATO sets out the guidelines on what is required for a Trust Deed. Here is a Trust Deed we prepared, based on the requirements of the ATO. Download and amend if for free to suit you SMSF.

Another option is to use a provider like Cleardocs that charges $137,50 for their Deeds.

2. ABN and TFN registration

The ATO is the regulator of SMSF’s and arrange for the registration of new Funds. You can apply for an ABN yourself from the Australian Business Register. The web address is:
https://abr.gov.au/

3. Trustee Minutes

The new Trustees and Beneficiaries have to attend a meeting and prepare minute noting the establishment of the new SMSF. Use the attached minutes download as a template for this meeting and similar meetings the Trustees will conduct in future.

4. Investment Strategy

The SMSF should have an investment strategy setting out what to invest in and the risk profile of investments. See this Investment Strategy template you can amend for this purpose. Or use as is if it suits your Fund.

5. Trustee Declaration

Trustees should elect to be a complying SMSF in order to be taxed at the reduced tax rate of 15%. If you do not make this election the Trust will be taxed at a marginal tax rate of 46.5%. Download the Trustee Declaration from here.

6. Annual Financial Statement

Trustees should keep records of all transaction the SMSF conduct throughout the year. Then prepare a set of financial statement. Here is a template you can use for this purpose. Click here to download.

Some general guides and hints when preparing financial statements:

1. Add you fund name and member names in the first sheet on top;

2. Add the income statement and balance sheet transactions in, always checking that the accounts are in balance. The yellow control totals on the side of the financials will help with this;

3. Add lines in for you fund specific investments. These financials are a guide only;

4. There are references to the income tax return next to each item in the financial statements. This will help you to complete the tax return; and

5. When uncertain on where to allocate items in the tax return, see the ATO guide that can assist you with this (see below).

7. Tax Return

You should also prepare a tax return for your SMSF. Here is the template of what the tax return looks like. All the information needed for the tax return will come from the template on the financial statements. This is similar to an individual tax return and if you have done your personal tax return before, you should be able to complete the Fund return. Here is the link to the instuctions on how to prepare the tax return.

8. Audit

The only function the Trustees can’t perform themselves is the annual audit. The Trustees can prepare financial statement and have the supporting documents ready. Attached below is the link with audit requirements. If you have all this in place, the audit should be without any issues. Our audit division, Audit Warehouse, offers fixed price audit of $450.

The audit requirements that you should prepare prior to audit is attached here. See Appendix A page 13 - 23 for all the requirements. A more user frienly audit checklist can be downloaded from here and we would require this signed off by the Trustees before auditing a SMSF.

9. Supervisory levy

Don’t forget there’s a $180 (was $150 in 2010) supervisory levy payable to the ATO. This is for the Fund, so if there’s more than one member in the SMSF, you will equally share this cost between Beneficiaries. This is payable with the annual income tax to the ATO on behalf of your SMSF.

Conclusion

The DIY SMSF route is open to you as Trustees. Feel free to use this. If you want to use an administrator, look at the total fees. Also flexibility. No use to pay the lowest administration fees and pay higher brokerage and receive low bank interest.

Superannuation Warehouse provides a great value service. If you want to use Superannuation Warehouse to perform these steps for you, we promote our service by having a free set up service. Click here to set up a new Fund. Or have a go yourself.

Good luck!! We hope to gain you as a client in Superannuation Warehouse.