setting up a smsf

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    Establishing a SMSF

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    Lasseter has prepared this presentation for general information purposes only and does not constitute personal advice.

    You should not act solely on the basis of material contained in this presentation. We recommend that formal advice is sought which considers all your individual objectives and needs.

    No material contained within this report should be construed or relied upon as providing recommendations in relation to any financial product.

    General Advice Disclaimer

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    Setting up a SMSF Obtain a trust deed which is a legal document that sets out the rules for establishing and operating the fund


    o powers, duties and responsibilities of the funds trusteeso rights of the memberso scope of the operation of the fund (what can and cant be done within the super laws)

    The Trust Deed must be individually tailored to your Fund

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    Setting up a SMSF Appoint trustees to the fund

    Trustees are appointed under the funds trust deed Remember, all members of the fund must be trustees or directors of the corporate trustee All trustees and directors must consent in writing to being appointed and keep these records for at lest 10


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    SMSF TrusteeDeciding on the type of trustee

    Individual trusteeso Up to 4 individual trustees - all individual trustees must be members of the fundo A fund cannot have an individual as a sole trustee

    Corporate (trustee company)

    o All directors of the corporate trustee must be members of the fundYour choice of trustee will make a difference to the way you administer your fund and the type of benefits it can pay

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    SMSF TrusteeComparing Individual versus Corporate Trustees:

    Individual Trustee o Less costly to establish

    Corporate Trusteeo More flexible and efficient when a member passes away or leaves the fundo Reduced litigation exposureo Cost to establish and maintain the company as a trusteeo Ability to pay lump sum benefitso Gearing in your SMSF most lenders will require a corporate trusteeo ASCI Annual fee (Currently $46 pa)

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    SMSF TrusteeSingle member funds

    You can set up your fund with only one member if you have a corporate trustee. The member must be one of the following:o the sole director of the trustee companyo one of only two directors, that is either

    related to the other director any other person but not an employee of the other director

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    Single member funds

    If you choose not to have a corporate trustee, you must have two individual trustees. One trustee must the member and the other must be a trustee that is either:o a person related to the membero any other person but not an employer of the member

    SMSF Trustee

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    Eligibility to be a trustee

    Anyone 18 or over and not under a legal disability (e.g. bankruptcy or mental impairment) can be a trustee unless they are a disqualified person.

    A person is disqualified if any of the following apply:o convicted of an offence involving dishonestyo subject to a civil penalty order under super lawso considered insolvent under administrationo are an undischarged bankrupto have been disqualified by a regulator (e.g. APRA)

    SMSF Trustee

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    Eligibility to be a trustee

    A company cannot be a trustee if:o the responsible officer of the company is a disqualified persono a receiver, official manager or provisional liquidator has been appointed to the companyo action has commenced to wind up the company

    SMSF Trustee

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    What it means to be a trusteeAs a Trustee of a SMSF you have a number of legal obligations placed upon you:

    Act in the best interests of all members when making decisionsManage the funds separately from your own affairsEnsure the money in the fund is only accessed when the law allows

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    Setting up a SMSFThe basic role of a SMSF is to hold and manage fund assets. This means:

    To be legally established your fund needs to hold assets The trustees hold the funds assets in trust for the benefit of the members Fund assets are held in the name of either:o Individual trustees as trustees for the fundo The corporate trustee as trustee for the fund

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    Setting up a SMSFEach Trustee is required to sign a declaration

    the declaration states:o you understand your duties and responsibilities as a trustee or director of the corporate trusteeo You agree to become a Trustee

    You must keep the declaration for as long as you are a trustee

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    Setting up a SMSFOne of the first assets a SMSF is going to have is Cash at Bank. Therefore a bank account needs to be opened:

    A Bank Account is required in order to:

    Receive Contributions and rolloversReceive Investment incomePay fund expenses

    In selecting the right bank account consider the following:

    Fees and costsData feed ability will significantly reduce your compliance costsTransactional online ability

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    Setting up a SMSFEstablish each member in the fund:

    Record each members TFNRecord each members personal detailsProvide each member with a Product Disclosure Statement (PDS) for the SMSF

    These details are usually record by your fund administrator. At Lasseter this is undertaken at the same time as we establish your SMSF.

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    Setting up a SMSFObtain the necessary registrations from the Australian Tax Office:

    Apply for an Australian Business NumberElect to become a regulated superannuation fundRegister for GST if required (Lasseter can advise you on if GST registration is required or financially beneficial based on your individual circumstances)

    Register for PAYG, if required (Lasseter can advise you on if PAYG registration is required based on your individual circumstances)

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    Trustees must have a written investment strategy and consider the following:o Circumstances of the fundo Establish the fund investment objectiveso Consider risk associated with the funds investmentso Establish fund asset allocationo Consider the funds liquidity requirements to pay benefits

    The trustees are required to invest in accordance with their strategy and review this on a regular basis. In addition to the fund investment strategy the fund must comply with the sole purpose test.

    Investment Strategy

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    41% SMSF trustees say they have no clear investment performance goals:

    o And with no formal SMSF benchmarks is it art over science 24.7% of SMSF trustees who have not sought advice admit their strategy was derived from gut instincto More likely to have strategy with an adviser (65.1%) than without (55.2%)

    50% of Trustees make financial decisions based on information in the general media

    o Trustees spend on average of 5 hours per week on research & managing fund

    Investment Strategy

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    The Sole Purpose Test is the golden rule for all superannuation Trustees The SMSF must be established for the sole purpose of paying retirement benefits.

    As a result there are restrictions on investments in related parties Restrictions on assets that can be acquired from related parties Restriction on personal use of fund assets

    Sole Purpose Test

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    Establishment Costs FREE (Lasseter will establish your SMSF at no cost) Corporate Trustee - $444 (One Off ASIC Fee) see our SMSF Starter Package Annual Accounting and Tax starting from $1320, see our Compliance and Administration Package Annual Audit starting from $330 * Annual ATO Levy - $150 Annual ASIC Fees - $212 (only for corporate trustee) Other Professional Fees ie Financial Advisor Investment Fees depending on investments chosen

    What are the Costs?

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    If you have any queries please call us on 1300 083 691


    We can contact you request via our website press here

    View our SMSF Starter Package

    View our Compliance and Administration Package

    What Next?

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    Lasseter InFocus

    Offices: T: 1300 083 691MelbourneAltona E: W:

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