How much super you need to set up an SMSF

There’s no minimum super balance required to set up a self-managed super fund (SMSF). However, very low balances may not be cost effective and could trigger a review by the Australian Taxation Office (ATO), which may prevent your SMSF from being registered.

Before deciding to set up an SMSF, compare the fees for your current super fund with the ongoing costs of running an SMSF.

An SMSF also allows you to combine your super balance with your partner or spouse.

Getting advice on setting up an SMSF

Stake Super can’t provide advice on whether an SMSF is suitable for you.

For personalised financial advice, consider speaking with a licensed financial adviser.

You can search for an SMSF Specialist Advisor under ‘Financial Planner’ on the SMSF Association website.

Setting up an SMSF while living overseas

If you’re currently living overseas, it’s unlikely you’ll be able to set up an SMSF. The fund must be established in Australia and its ‘central management and control’ must also be in Australia.

For more information, see ‘Check if your fund is an Australian super fund’ on the ATO website.

If you’re an Australian resident and plan to move overseas for more than two years, this may also affect your ability to remain a member and trustee of your SMSF. Consider seeking specialist advice if this applies to you.

SMSF members

An SMSF can have up to six members.

Most SMSFs have one or two members. Two-member SMSFs are often made up of a couple.

One SMSF member can’t be an employee of another member unless they’re related.

Member accounts and investments

Generally, each SMSF member has their own member account balance. However, cash accounts and investments are pooled within the SMSF.

Learning about your SMSF trustee responsibilities

The SMSF Association provides information for SMSF trustees through its SMSF Connect website, including a free learning course.

The ATO also lists approved SMSF education courses on its website.

Individual and company trustees

Depending on your circumstances, a special purpose company trustee is generally considered more appropriate than having two individual trustees.

Reasons for using a special purpose trustee company may include:

• An SMSF can be set up with one person as the sole member
• The company trustee helps keep the legal title to investments separate from personal assets
• Members can be added to or removed from the SMSF without changing the name on investments, which can otherwise involve additional time, paperwork and fees

Company trustees also have additional setup costs and ongoing record-keeping obligations.

Documents needed to set up an SMSF

You’ll need the following documents to set up your SMSF:

• SMSF trust deed, also known as a ‘Deed of Establishment’
• Trustee resolutions to establish the SMSF
• Trustee consents to act
• Membership applications
• ATO trustee declarations

If you’re setting up an SMSF with a corporate trustee, you’ll also need:

• A special purpose trustee company constitution
• Director consents
• Member resolutions for the trustee company
• A director ID number

The following aren’t essential when you first set up your SMSF but are required as part of running it:

• SMSF investment strategy
• Minutes appointing an auditor

Stake Super provides the required documentation to establish an SMSF as part of our service.

SMSF trust deeds

Only lawyers can draft legal documents such as an SMSF trust deed. Stake Super has engaged a specialist SMSF document provider that provides legal sign-off and regular updates to its documents.

Choosing an SMSF name

There are no major restrictions on SMSF names and, unlike company names, they don’t need to be unique.

When naming your SMSF, we recommend:

• Keeping the name short – less than 18 characters in total
• Including the word ‘Fund’
• Using ‘super fund’ rather than ‘superannuation fund’
• Using or referring to your family name or surname
• Avoiding names that are overly long, complex or offensive, or that may trigger an ATO review of your SMSF registration

Stake account requirements

You don’t need a personal Stake account before setting up an SMSF.

During the application, you’ll need to provide your personal details to create a profile. Your SMSF account will then be linked to this profile.

Minimum SMSF cash balance

There’s no minimum cash balance you need to keep in your SMSF. However, you’ll need enough cash available to cover fees, insurance premiums and taxes when they’re due.