The setup of a Self Managed Super Fund (SMSF) isn’t too hard once you understand the basics, but it does come with rules you can’t ignore. Here’s a clear, step-by-step guide that explains how the setup works, what the ATO expects, and what you need to get right from day one.
What is an SMSF?
An SMSF is a private super fund you manage yourself. You control the investment decisions, and an approved SMSF tax agent handles the admin, accounting, reporting and annual audit.
The ATO treats SMSFs seriously, so the setup needs to be done properly — structure, trustees, bank accounts, investment strategy, the whole lot.
How to set up an SMSF (step by step)
1. Choose your trustee structure
You’ll need to pick one of two structures:
Individual trustees
- Minimum of two individuals (unless you are a single-member fund with a second person as trustee).
- Cheaper to set up.
- But assets must be held in every trustee’s name, which becomes messy if people join or leave.
Corporate trustee
- A company acts as the trustee.
- Cleaner for asset ownership — everything sits under the company name.
- More flexible if members change.
- Slightly higher cost but usually worth it for simplicity.
Most modern SMSFs use a corporate trustee because it makes administration easier long-term.
2. Create the trust and trust deed
An SMSF is a trust, so it needs:
- A trust deed (the rulebook)
- Trustee declarations
- Properly signed and dated legal documents
You can’t skip this part. The ATO requires formal paperwork before the fund can exist. The trust is the core document of an SMSF and getting it right is a key step in the setup process.
3. Register the SMSF with the ATO
Once the legal structure is ready, the next step is registration.
You’ll need to:
- Apply for an Australian Business Number (ABN) for the SMSF
- Apply for a Tax File Number (TFN)
- Make sure the ATO has the correct trustee details and contact information
Most registrations are processed within two weeks. Until registration is complete, the fund can’t create a bank account and accept contributions or rollovers.
4. Set up an SMSF bank account
Your SMSF needs its own bank account. No mixing with personal money — ever.
This account is used to:
- Receive contributions
- Receive rollovers from your existing super fund
- Pay investment costs
- Pay accounting, tax and audit fees
- Receive investment income (rent, dividends, etc.)
Every dollar must be traceable for audit and ATO reporting.
5. Roll over your existing super
Once the SMSF is active (ABN registered), you can move your existing super balance across.
You’ll generally do this through the existing super fund’s online portal. They will validate the SMSF’s details through SuperStream before releasing funds.
Nothing can be rolled over until the SMSF is compliant and set up correctly.
6. Create your investment strategy
The ATO requires every SMSF to document a formal investment strategy. This isn’t optional.
Your strategy must outline:
- How the fund plans to invest
- Risk levels
- Liquidity
- Insurance considerations
- How investments suit member retirement goals
This strategy should be reviewed regularly or when big changes happen — new members, major asset purchases, market shifts, and so on.
7. Start investing
Once the strategy is in place, you can invest according to the rules. An SMSF can invest in a wide range of assets, including:
- Shares
- Managed funds
- Cash and term deposits
- Property
- cryptocurrency
- precious metal bullion
- Some alternative assets (e.g., motor vehicles, collectibles — with strict rules)
Every investment must be:
- Allowed under the trust deed
- Allowed under the investment strategy
- Made for the sole purpose of providing retirement benefits
- Kept separate from personal use
“Because I want it” is not an acceptable reason for an SMSF investment.
8. Stay compliant every year
An SMSF is not “set and forget.” Each year, you must:
- Prepare financial statements
- Lodge an SMSF annual return
- Arrange an independent audit
- Keep accurate records
- Ensure contributions and payments follow ATO rules
Most trustees use an SMSF tax agent (like Jarospace) to handle the admin and compliance so they can focus on the investing side.
If you like the idea of Jarospace doing an SMSF setup for you:
How long does it take to setup an SMSF?
Most SMSFs can be setup in 3–4 weeks, depending on:
- How quickly trustees provide the required information
- How long the ATO takes to register the fund
- How fast the previous super fund processes rollovers
It’s usually a smooth process if the paperwork is done correctly upfront.
How much does it cost to setup an SMSF?
Typical setup costs include:
- Creating a trust deed
- Registering a corporate trustee (if chosen)
- Setting up the SMSF structure
- Ongoing yearly accounting, tax and audit fees
Costs vary depending on the provider and structure, but most SMSF trustees focus on long-term control rather than the upfront fee.
Is setting up an SMSF right for you?
An SMSF gives you control — full stop. You choose where the money goes, and you’re responsible for making sure the fund follows the rules. If you want that level of control and are comfortable making investment decisions, an SMSF can make sense.
If you don’t want to think about compliance, you can outsource the admin to a registered SMSF tax agent so everything stays above board.
Final word
Setting up an SMSF isn’t complicated when the steps are followed properly. The key is getting the structure right from the start, registering it correctly with the ATO, and keeping everything compliant each year.
If you want help with the admin side — setup, accounting, tax and audits — that’s exactly what Jarospace handles. You keep the control; they keep the paperwork in line.
CONTACT US
You can also write to us at
info@jarospace.com
Or call us on 0489 074 123
Business hours
9 am – 5 pm
Monday – Friday
We will respond to your enquiry
within 2 business days.
