• Self-Managed Super Funds (SMSFs) can offer a number of benefits generally not available with other super options, including more investment control, investment choice and one fund for the family.
  • A trustee of an SMSF handles meeting a range of legal and other obligations that include implementing an investment strategy, preparing and keeping records and holding assets for the purpose of providing benefits for SMSF members.
  • The trustee of an SMSF handles all investment decisions and the associated risks, as well as ensuring compliance with super and tax laws.

Benefits of Setting Up A Self-Managed Super Fund

Compared to other types of super funds, a self-managed super fund (SMSF) is set up by members are also the trustees. Hence, members of an SMSF run the fund for their own benefit and manage the administration, super and tax requirements themselves. SMSFs are still regulated by the Australian Tax Office. When registering, you can elect for your fund to be regulated, get a TFN and ABN, and register for GST if necessary.

Administration of SMSFs

A self-managed super fund must manage its administrative and reporting obligations – failure to do so may result in harsh penalties. Setting up a SMSF is complex and requires a strong understanding of the regulations and legal requirements. Consider appointing an accountant or financial adviser to help set up and run your fund. You must notify the ATO within 28 days if there is a change in trustees, directors of the corporate trustee, members, contact details or address, change in fund status.

Investment of Funds

As the super fund is self-managed, this means trustees must make investment decisions for themselves. Before you start making investments, you must have an investment strategy. Fund investments must be made in the best interests of members and accordance with the law. Most importantly, SMSF investments must be made separate from all personal and business affairs of SMSF fund members.


SMSFs can either have individual trustees or a corporate trustee, which is a company acting as trustee for the fund. As an SMSF is a type of trust, it requires trustees, assets, beneficiaries and the intention to create a trust. SMSFs are formed by a trust deed, which sets out the rules for establishing and operating the fund. All trustees and directors need to sign a declaration within 21 days stating that they understand their duties and responsibilities.

Bank Account

SMSFs need a bank account so it can accept cash contributions, receive income from investments, pay fund expenses and pay benefits to members. The account needs to be opened in the names of your fund’s trustees, and the money must be kept completely separate from your personal or business assets.

Key Issues

  • To be a complying super fund and receive tax concessions, the SMSF needs to be a resident regulated super fund at all times during the income year.
  • An SMSF relies on the management of the fund’s investments in the best interests of fund members. Investments must be separate from the personal and business affairs of fund members.
  • You must still oblige by super laws and regulations, which may impose restrictions on when payments can be made to fund members and preserved benefits which can only be accessed if the member reaches preservation age.

Key Considerations for SMSFs

There are a number of key considerations in setting up and maintaining a self-managed super fund.


Tn ensure the SMSF receives tax concessions, the SMSF must be established correctly to receive contributions. Its structure, the trust deed and the appointment of trustees must be planned from the start.


As a trustee, you can accept contributions from SMSF members within the fund. There are some restrictions which apply, which include the member’s age and the contribution caps. Note there are minimum standards for accepting contributions in your SMSF.

Paying of Benefits

SMSFs can only pay a member’s super when the member reaches their preservation age and meets the set requirements of release, such as meeting the retirement age. The type of payment, whether a lump or an income stream, will depend on the circumstances and structure of the SMSF.

Winding up a SMSF

A SMSF can be wound up if members and trustees have all left the SMSF or if all benefits have been paid out. To wind up a SMSF, all requirements in the trust deed about winding up must be carried out, which may include appointing a SMSF auditor to complete the final audit, the lodge the final annual return and pay any outstanding tax.

Frequently Asked Questions about Self-Managed Super Funds

Q: What is a trustee?
A: A person or entity that holds or administers property or assets for the benefit of a third party.

Q: What is the preservation age?
A: The preservation age is the age you must reach before you can access your super.

Q: How many members can an SMSF have?
A: An SMSF can have between one to four members. Each member is a trustee (or director if there is a corporate trustee).

Q: How do I wind up an SMSF?
A: The key responsibilities are dealing with the member benefits, arranging the final audit, advising the ATO and lodging a final annual return.

Q: Who is liable to pay administrative penalties?
A: As an individual trustees or director of corporate trustees, you may be personally liable to pay an administrative penalty if the laws relating to SMSFs are not followed.

Q: What is the dispute handling mechanism for SMSFs?
A: SMSF trustees and members cannot raise claims to the Superannuation Complaints Tribunal to resolve complaints. Disputes among SMSF members need to be resolved by members.

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