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Set up your SMSF with TMS Financials
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Why consider setting up SMSF

If you’re thinking about starting a Self-Managed Super Fund (SMSF), it’s crucial to understand the tax responsibilities that come with managing your own super fund. Each year, you need to submit an SMSF tax return to the Australian Taxation Office (ATO). This tax return includes details about the fund’s earnings, expenses, contributions, and investments, which are vital for the ATO to determine your fund’s tax duties.

Here at TMS Financials, we are committed to assisting you from setting up the fund through to the ongoing management of your SMSF. We help ensure your fund adheres to superannuation laws and ATO rules, covering everything from the initial SMSF setup and ATO registrations to managing fund assets and the structure of trustees.

Our goal is to ensure your SMSF fulfills its tax obligations, while optimising the benefits available to you. Whether it’s managing contributions, investments, or ensuring compliance with superannuation laws, our team is here to support you every step of the way.

Why choose TMS Financials?

Detailed guide to setting up your SMSF and selecting trustees

When you decide to create your own SMSF, one of the first decisions you’ll need to make is the type of trustee structure to use. You can choose between individual trustees or a corporate trustee. Each choice offers its own advantages, depending on factors such as how many members your fund will have and your requirements for protecting assets. Our team at TMS Financials will support you through the setup process of your SMSF. We’ll help with drafting your trust deed, choosing your trustees, and completing registrations with the Australian Taxation Office (ATO). We ensure that your fund is set up correctly so it can properly receive and accept contributions from both members and employers.

Investment strategy and ensuring compliance

Having a robust investment strategy is essential for responsibly managing your fund assets. We can connect you with a financial adviser who will help you develop a strategy that matches your financial objectives and adheres to superannuation laws. At TMS Financials, we handle the ongoing compliance requirements of your Self Managed Superannuation Fund. This includes conducting the annual audit, keeping trustee minutes, and making sure your fund complies with its governing rules. These steps are crucial in protecting your fund from risks associated with non-compliance.

Operational support and guidance

Once your SMSF is operational, as an individual trustee or director of the corporate trustee, you’re legally obligated to manage the fund’s compliance. This responsibility includes tasks such as opening a dedicated bank account for the fund, setting up an electronic service address to receive electronic contributions, and overseeing all fund operations. This involves using the fund’s bank account to cover expenses and making investment decisions. Should a fund member pass away, we’re here to help execute binding death benefit nominations in accordance with the trust deed. Our continuous support and professional advice ensure your SMSF runs smoothly, helping you stay on course with your retirement planning and ensuring it aligns with your best interests.

Set Up Your SMSF with TMS Financials

Our team at TMS Financials specialises in providing personalised tax solutions tailored to your unique situation. We can help you navigate through the complexities of tax planning, identify the most effective strategies for your situation, and ensure you maximise your tax savings.

We’re an Australian tax accounting firm with 30+ years of experience serving business owners and investors. Our reputation for reliability and exceptional client service is built on providing accurate financial advice and asset protection. We remain committed to serving our clients with integrity, professionalism, and quality, and have the expertise to help you succeed.

TMS Financials is online now

We are a Sydney based tax accounting firm servicing clients Australia wide online since 1993

Eng Sivieng

Principal of TMS Financials

We strive to build long-term relationships with our clients and to be a trusted advisor for all their financial needs.

SMSF Accounting Solutions Specialist at TMS Financials

TMS Financials have supported hundreds of SMSF clients, providing top-tier SMSF accounting services. Our team of SMSF professionals manages the entire process from SMSF setup to completion, leveraging strategic relationships with several financial advisory firms and a nationally recognised auditing firm to conduct the SMSF audits. If you require a skilled SMSF accountant who guarantees quality service and ensures compliance with annual returns and tax regulations, we are here for you.

Being technologically adept aids in streamlining the management of your fund. Several platforms enable investors to efficiently track their stock gains and losses. SMSFs allow for a varied investment portfolio, including stocks and property. However, all investments must prioritise the best interests of the fund’s members. Considering the annual costs for financial advice, accounting, and auditing, SMSFs may not be suitable for everyone. The Australian Taxation Office (ATO) sets guidelines on the minimum balances required to establish an SMSF, ensuring it’s a viable option for potential investors.

Compliance and administration duties for your SMSF

As a trustee, you’re tasked with several important compliance and administrative duties:

  1. Appoint an SMSF auditor to perform annual audits.
  2. Accurately value the fund’s assets to ensure precise annual returns.
  3. Submit an SMSF annual return to the Australian Tax Office (ATO).
  4. Report any events affecting the Superannuation transfer balance account.
  5. Keep detailed records of all fund operations.
  6. Inform the ATO of any significant changes in your fund’s structure or operations.
  7. Regularly verify your SMSF’s registration status. For guidance on how to do this, you can visit the ATO’s website.

These responsibilities are essential to maintain the health and compliance of your SMSF, ensuring it meets legal standards and operates effectively.

 

Compliance and administration duties for your SMSF

As a trustee, you’re tasked with several important compliance and administrative duties:

  1. Appoint an SMSF auditor to perform annual audits.
  2. Accurately value the fund’s assets to ensure precise annual returns.
  3. Submit an SMSF annual return to the Australian Tax Office (ATO).
  4. Report any events affecting the Superannuation transfer balance account.
  5. Keep detailed records of all fund operations.
  6. Inform the ATO of any significant changes in your fund’s structure or operations.
  7. Regularly verify your SMSF’s registration status. For guidance on how to do this, you can visit the ATO’s website.

These responsibilities are essential to maintain the health and compliance of your SMSF, ensuring it meets legal standards and operates effectively.

Why consider setting up an SMSF?

One of the main reasons many people choose to establish a Self-Managed Super Fund (SMSF) is the flexibility it offers to invest their superannuation contributions in assets beyond just publicly listed stocks, such as property investments. This is particularly appealing for those interested in real estate.

The significant advantage of an SMSF, especially for property investors, is the level of control it provides. When you manage your own SMSF, you oversee your bank accounts and make all the investment decisions. This control extends to the broader decision-making process, enabling you to tailor your investment strategy and fund operations to align closely with your financial goals.

With an SMSF, you’re responsible for appointing trustees—whether choosing an individual trustee structure or a corporate trustee structure—and ensuring your fund complies with superannuation laws. You’ll also handle the fund’s assets and contributions, and maintain detailed financial statements. Crucially, this structure allows you to tailor the fund to meet specific needs, such as preparing for retirement or maximising tax efficiencies, in ways that other super funds might not permit.

Is an SMSF suitable for you?

Deciding if a Self-Managed Super Fund (SMSF) is right for you depends on your financial situation, your future goals, and your desire for greater control over the investments made with your superannuation savings. Running an SMSF involves ongoing costs, including fees for accounting, tax compliance, auditing, legal services, and potentially financial advice, if you opt for professional guidance on your investments.

Among these costs, getting quality financial advice can be very important. Inadequate advice can severely impact the performance of your SMSF investments, which are essential for supporting your lifestyle in retirement. Therefore, it’s vital to choose a financial adviser who is reputable and committed to acting in your best interests.

For many people, a regular industry super fund might be a more cost-effective and less burdensome option. These funds are professionally managed and can offer a simpler path to retirement savings. If you’re considering an SMSF, we highly recommend consulting a professional to discuss whether it’s the most appropriate choice for your circumstances.

FAQs

How much do I need in my super to start an SMSF?
While there is no official minimum balance required to start an SMSF, opinions on an advisable starting amount can vary widely among accountants and financial advisers. A more pertinent question might be: What are the costs of setting up and maintaining an SMSF, and does the increased control over investment decisions justify these expenses?

Typically, running an SMSF becomes cost-effective when your balance reaches around $250,000. This is due to the ongoing costs associated with an SMSF, such as the annual supervisory levy paid to the Australian Taxation Office (ATO), accounting fees for preparing financial statements and tax returns, costs for an independent audit, and possibly financial planning fees, if you choose to engage a licensed financial adviser to oversee your investment strategy.

What can an SMSF invest in?
SMSFs provide a unique opportunity to manage your own investment strategy, but they don’t guarantee higher returns than industry super funds. While they offer the potential for significant gains, they also pose a risk of greater losses.

As the trustee of an SMSF, you have the freedom to shape your investment approach. You can also opt to work with a financial adviser for expert guidance on managing your investments. At TMS Financials, we maintain strategic partnerships with some of Sydney’s leading financial planning firms. We can connect you with a firm that aligns with your needs, whether you are in the accumulation stage of your career or preparing for retirement.

What is a non-concessional contribution?

When you make personal contributions to your superannuation fund, these can be classified into two main types:

Concessional contributions (before-tax contributions)

These are voluntary contributions made into your super fund from your pre-tax income and are taxed at a rate of 15%.

Non-concessional contributions (after-tax contributions)

These are voluntary contributions made from your post-tax income. Since you’ve already paid tax on the money used for these contributions, they’re not taxed again within the fund.

Non-concessional contributions are beneficial because they don’t incur additional tax within the super fund. However, it’s crucial to be aware of the contribution caps. Exceeding these caps can result in additional taxes, so understanding the annual limits is important for managing your super effectively. For more detailed information, you might want to read our article on Non-Concessional Super Contributions.

What is the bring forward rule and how does it work?

The bring forward rule allows you to make larger non-concessional contributions to your superannuation over a shorter period. This rule is especially useful if you wish to significantly increase your super balance in a compressed timeframe. However, there are specific conditions related to this rule:

Age Restrictions

You must be under a certain age to use the bring forward rule.

Previous Contributions

Your prior non-concessional contributions affect your eligibility.

Super Balance

The total amount already in your super, known as the transfer balance cap, also plays a crucial role in determining if you can apply this rule.

Understanding these guidelines is essential to avoid making excess contributions, which could lead to additional tax liabilities. For a deeper insight into how you can maximise your super contributions using this strategy, consider reading our article “Understanding the bring forward rule for better retirement planning“.

Contact us today for a consultation.

Contact us today to learn more about how our accounting services can benefit your business. We look forward to hearing from you and helping you achieve financial success!

Set up your SMSF today!

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