What does the set-up fee for SMSF’s actually cover and can the fund reimburse me once it is established?
It includes the establishment of the SMSF and the trustee company, preparation of the relevant paperwork, ABN and TFN applications and registrations, and all postage and handling. Unfortunately the establishment fee cannot be reimbursed. This is because at the time you incur the expense the fund does not exist. You are not able to claim a tax deduction for the expense as it is for a new structure and this expense falls into the ‘black-hole’ of non-deductible expenses.
How long will the setup of a new SMSF take?
Once payment and all the relevant paperwork/information has been received, we can have it fully functional in around 48 hours. The ABN and TFN can take up to 28 days to be issued by the ATO, and the rollover of funds into your SMSF can take a long time and be a painful process – some superannuation providers can drag this process out, so be prepared for delays!
How many members can I have in my SMSF?
A SMSF can only have a maximum of four members in the fund. All members must be either a trustee of the fund or a director of the trustee company.
Should I have a corporate trustee or an individual trustee?
We recommend a corporate trustee, as it gives you a clear name for when you are investing in your SMSF rather than getting confused about the ownership of the investments (as they are held in the trustees name). The corporate trustee also allows for up to three more members to be added later on without the prohibitive cost of changing all the paperwork on existing investments.
Who should I use as the director/secretary/shareholder roles in the trustee company?
All members of the SMSF are required to be directors in the company. We advise that members also be shareholders. A secretary is no longer required.
Which name should appear on the SMSF bank account?
The full name should appear on the SMSF bank account, “the trustee company as trustee for the SMSF name”, eg. Living My Dream Pty Ltd ATF The Freedom Super Fund
What if my current superannuation fund has life/trauma/permanent disability insurance? Does this mean that the new SMSF will also include this?
No! If you or your partner’s existing superannuation fund holds this insurance you will need to discuss whether you want to continue with it, and if so you will need this setup in your new SMSF before rolling over the funds. This is important: in the unfortunate event that something happened while you were in the process of rolling your funds over you may not be covered.
My wife and I have our own SMSF. The fund owns a residential property that’s leased out. The property is a house on its own title. Can I borrow funds against this property under the same rules and regulations that would apply if the SMSF was buying a different property using a bare trust or warrant type instrument?
Unfortunately, an existing SMSF property cannot be used as security for a new loan. A SMSF loan can only be used to purchase a new property (new to the fund anyway) or possibly refinance an existing loan, but not to access equity in an existing property already in the SMSF.
My husband and I have a self-managed super fund which has a property in a bare trust. I just got a land tax bill for $625.75 for land worth $170,000. This is the higher rate due to the bare trust being a ‘trust’. When we pay off the loan and transfer the property from the property (bare) trust into the super fund's name, is the land tax still at the higher rate?
Depending on which state/territory you are in, the Bare Trust is a fixed trust and as such should not incur the trust surcharge rages of land tax. When the property is in the Super Fund’s name the land tax will be at the normal rates.