Heffron | Australia's leading independently owned SMSF administrator

How to set up an SMSF


Learn

The first step in considering an SMSF is to do your research. It’s important that you are aware of the benefits and costs of an SMSF as well as your responsibilities as trustee to ensure you make the right decision on whether an SMSF is right for you.

Before getting started, we would recommend reading the following topics:

Apply

Decide what to call your fund

The flexibility you will enjoy with your SMSF starts with naming it. You can call it anything you like. SMSFs don’t even have to have unique names for example, there are many SMSFs called “Smith Superannuation Fund”. People often use their own name as a starting point because the fund name is then easy to remember. We have identified a number of tips for naming your super fund:

Don’t start your SMSF name with “The”. This can confuse government databases, sometimes it will be under “T” and sometimes under the first letter of the rest of the name.

Avoid using punctuation as only some databases and systems can handle these characters

Add “Superannuation Fund” to the end of the name. It helps make it very clear what the fund is, particularly if you have other entities such as family trusts etc.

If you have a public role and an unusual name, we recommend not using your surname when naming your fund. The name of your fund (but not confidential information about how much is in it etc.) will be available on publicly searchable databases.

Choose a trustee structure

SMSFs are just one example of a special type of legal entity known as a “trust” and all trusts have “trustees” (the people who are in charge). The trustees of your SMSF can be a group of individuals or you can set up a company to be the trustee. If you set up a company, the people in charge will be the directors of that company.

We recommend all SMSFs set up a company to be the trustee for many reasons but largely because it is simpler and gives you better protection and control when things in the SMSF change. Things can change for many reasons - a member might die, suffer from an illness like dementia or accident that means they are no longer allowed to make decisions or a new member might join. These are dealt with far more easily when the trustee is a company. You can learn more about the different trustee types in our Knowledge Centre.

Like your SMSF, you can choose the name of your trustee company. However, you have less flexibility because company names must be unique and there are some words that are simply not allowed e.g. profanities, words that imply an association with the government and words that are too close to another company’s name. Generally, people choose something similar to their fund name. For example, a fund called Brown Family Superannuation Fund might have a trustee company called Brown Family Superannuation Pty Ltd

Complete the application

In order for us to set-up your SMSF and investment account you will need to complete an application providing us the following details:

  1. A name for your fund and (if applicable) a name for the company you’re setting up to be the trustee of your fund
  2. For all members, trustees and/or directors:
  • Title
  • Legal Name (including middle names) – this must be the same as their name on official documentation such as passports, drivers licence, etc.
  • Date of birth
  • Place of birth (town and state if within Australia or Country only if outside of Australia)
  • Tax File Number
  • Some identification information for NAB (drivers’ licence number, passport number, NAB Identification Number (NIN) for existing NAB customers)
  • Contact details (phone number and email address)
  • Street Address (where the person normally lives, not a PO Box or their work address)

Establish

Receive and sign the establishment documents

Once Heffron have received your application, we will start setting up the fund. You will receive a fund establishment pack by post for you to review and sign. The establishment pack includes all documents needed to establish your SMSF. It comes clearly marked explaining what you need to do and shows where you need to sign and date.  We aim to have the fund establishment pack issued in less than four business days from the time we receive all correct information from you.

Heffron reviews executed documents and register the fund with the ATO

Once we receive the signed documents back, Heffron will conduct a final review of the executed documents to make sure they have been signed, dated and witnessed in all the correct places.

Once we’ve done this, we’ll register the fund with the ATO on your behalf. The ATO will allocate a tax file number (TFN) and an Australian Business Number (ABN) to your fund. This may take up to 28 days, however in our experience it is generally quicker.

Activate

Once Heffron has established your SMSF, you can then start depositing money into your fund, including rolling over your existing super balance and redirecting any employer contributions to your SMSF.

Rollover your existing super

When you first set up an SMSF you will likely have money in another superannuation fund that you want to transfer to your SMSF. This type of transfer is called a "rollover."

If you're going to close your old super account and move it all to your SMSF, you can complete an ATO rollover form and send it to your old super fund. If you have more than one super fund, you will need to complete a separate form for each fund.

If you want to leave some money in your old super account, you will need to contact your old fund and ask them for the forms to transfer only a portion of your balance to your new SMSF.

Redirect Employer contributions to your SMSF

If your employer is going to contribute to your SMSF, you’ll need to give them two documents:

  • A completed Superannuation (super) standard choice form. If your fund was set-up by Heffron this was included in your Welcome Pack. If you join a new employer after your SMSF has already been established, simply complete another form and provide it to your new employer.
  • A document confirming the fund is recognised by the Australian Taxation Office as a regulated fund. You can locate and print a copy of your fund's status by searching your fund ABN or name in the Super Fund Lookup service.