SMSF Setup

No. SMSFs suit members who want active control of their retirement savings, are willing to take on trustee responsibilities, have a balance large enough to make the ongoing administration and audit costs cost-effective, and are willing to spend time on compliance and strategy. For many people, an industry or retail fund is the right answer. The decision is a personal one that should be made with personal financial advice.

Individual trustees are members who personally act as trustees; this is cheaper to set up but creates an administrative burden whenever a member changes (death, marriage breakdown, capacity issues), and ATO penalties under the SIS Act apply to each trustee individually. A corporate trustee is a Pty Ltd company that acts as trustee; this costs more to set up (ASIC fees) but is administratively cleaner over the long run, isolates the fund's assets, and applies penalties to the company rather than each individual. Most newly-established SMSFs use a corporate trustee.

Setting up an SMSF includes: establishing the trust (signed trust deed), appointing trustees and (where applicable) the corporate trustee company, registering with the ATO for an ABN and TFN, electing to be a regulated SMSF, opening a fund bank account, organising an investment strategy document, rolling over existing super balances, and meeting record-keeping requirements from day one. Each step has a specific timing and order.

Each year an SMSF must prepare financial statements, lodge an SMSF annual return, undergo an independent audit by an ASIC-registered SMSF auditor, maintain a current investment strategy, comply with contribution caps, comply with the sole-purpose test, and stay within the in-house asset rules and related-party transaction rules. We coordinate the accounting, audit and lodgement annually as a recurring SMSF compliance package.

The sole-purpose test requires that the SMSF be maintained solely for the purpose of providing retirement benefits to members or their dependents. It is the foundational SIS Act rule that determines whether an SMSF investment is legitimate. Investments that provide a present-day benefit to members or their relatives (using fund assets personally, related-party rent below market) breach the sole-purpose test and put the fund's complying status at risk.

Yes, an SMSF can hold property as an investment, subject to the investment strategy and SIS Act rules. Property can be acquired outright or, in some cases, through a Limited Recourse Borrowing Arrangement (LRBA). LRBAs are a separate, more complex area with specific compliance requirements, so we scope them as a separate engagement — the SMSF compliance side through our SMSF service and the lending side through our finance and mortgage broking service. Whether property, or an LRBA, suits a particular fund is a personal decision that should be made with personal financial advice.

Often, yes. Eternity Group Accountants provides SMSF accounting and tax services; we are not licensed to provide personal financial product advice. Decisions about whether to establish an SMSF, what to invest in, contribution strategy and pension strategy involve financial product advice that requires an AFSL (Australian Financial Services Licence). We work alongside licensed financial advisers and refer clients where appropriate.

SMSFs can be wound up. The process involves selling fund assets (or rolling them out where permissible), paying out member benefits or rolling them to another fund, lodging a final SMSF annual return, completing the final audit, and deregistering with the ATO. There are tax and CGT implications depending on the assets and member ages. We can scope a wind-up engagement separately.

Establishment is only the beginning. From the first year the fund needs financial statements, an SMSF annual return, an independent audit by an ASIC-registered SMSF auditor, a current investment strategy, and ongoing compliance with contribution caps, the sole-purpose test and the related-party rules. Eternity Group Accountants coordinates the accounting, tax records, audit liaison and lodgement each year; we do not provide personal financial product advice or legal advice. Whether an SMSF suits you, what it should invest in, and any borrowing or estate-planning questions are decisions for a licensed financial adviser or solicitor, and we work alongside them.