How to Set Up an SMSF: Your Step-by-Step Guide
Setting up a self-managed super fund (SMSF) in Australia involves nine key steps-from choosing your trustee structure and creating a trust deed, to registering with the ATO and preparing a compliant investment strategy. While the process gives you more control over your retirement savings, it also comes with strict compliance responsibilities under Australian tax law.
This guide explains exactly how to set up an SMSF, what to consider before you start, and how Origin Business Consultants can support your compliance and strategy every step of the way.
Should You Set Up an SMSF?
If you’re thinking about managing your own super, it’s important to weigh the benefits against the obligations. An SMSF puts you in control of how your super is invested-but it also means you’re legally responsible for the fund’s management and compliance.
Quick summary – SMSF pros and cons:
- Control: Choose your own investments, including property, shares, and managed funds.
- Flexibility: Tailor your retirement strategy to suit your risk appetite and goals.
- Responsibility: You take on legal duties as a trustee, including tax reporting and audits.
- Time commitment: Ongoing administration and professional advice are often required.
- Costs: Establishment and running costs may outweigh benefits for small balances.
Minimum Balance & Time Commitment
There’s no fixed minimum balance required to start an SMSF, but most professionals recommend at least $200,000 in combined super to make the fund cost-effective. SMSFs have setup and ongoing costs-such as accounting, auditing, and ATO levies-that don’t scale based on balance size.
You’ll also need to commit time to understanding the rules, documenting decisions, and maintaining compliance. While Origin Business Consultants can manage the tax and reporting aspects, you remain ultimately responsible as trustee.
Individual vs Corporate Trustee Structure
Your first major decision is whether to establish the SMSF with individual trustees or a corporate trustee. This impacts control, asset protection, and future flexibility.
| Trustee Type | Description |
|---|---|
| Individual Trustees | Each member is a trustee. Lower setup cost, but harder to manage if members change. |
| Corporate Trustee | A company acts as trustee; each member is a director. Higher setup cost, but better for succession planning and administration. |
Nine Steps to Set Up an SMSF Correctly
To understand the full setup process from the ATO’s perspective, refer to their official guide: Setting up an SMSF
Once you’ve confirmed an SMSF suits your needs, the next step is to follow a clear, compliant process. The Australian Taxation Office (ATO) outlines nine key steps every SMSF must complete:
1. Choose Your Trustee Structure
Decide on individual trustees or a corporate trustee. A corporate trustee offers greater flexibility and administrative simplicity long-term, especially for families and business owners.
2. Create a Compliant Trust Deed
Your SMSF trust deed must be professionally drafted to reflect your investment goals and comply with superannuation law, detailing trustee responsibilities and fund management.
3. Sign Trustee Declarations
Each trustee (or director) must sign the ATO Trustee Declaration within 21 days of becoming a trustee, confirming they understand their obligations. View the ATO Trustee Declaration
4. Register Your SMSF with the ATO
Apply for an ABN and TFN, register as a regulated SMSF, and pay the annual supervisory levy through the Australian Business Register. You can complete this step yourself via the ATO’s online system, or work with a trusted SMSF specialist like Origin BC to ensure it’s done correctly from the outset. Register your SMSF here
5. Open a Bank Account and Obtain an ESA
Establish a dedicated SMSF bank account and obtain an Electronic Service Address (ESA) for contributions and rollovers.
6. Develop an SMSF Investment Strategy
Document your investment approach, including risk tolerance, liquidity, diversification, and insurance coverage for fund members. We help align your strategy with compliance and tax obligations.
7. Accept Contributions and Rollovers
Receive employer contributions, roll over existing super balances, and consider personal or concessional contributions, staying within ATO contribution caps.
8. Register for PAYG Withholding (If Required)
If your SMSF pays pensions or employs people, register for Pay As You Go (PAYG) withholding to manage tax obligations correctly.
9. Appoint an Approved SMSF Auditor
Complete an annual audit by an ASIC-approved auditor before lodging your SMSF annual return. Learn more at ASIC
Staying Compliant After Your SMSF Is Established
Establishing your SMSF is only the beginning. Ongoing compliance is essential for maintaining your fund’s tax advantages and legal status.
Annual Returns, Audits & ATO Deadlines
Every SMSF must lodge an annual return and complete an independent audit each financial year. Origin BC ensures timely submissions to avoid penalties.
Record-Keeping & Reporting Obligations
Trustees must maintain accurate records for at least 5–10 years, including financial statements, trustee minutes, investment strategies, and audit reports.
Common Penalties for Non-Compliance
Non-compliance can result in significant penalties and fund disqualification. We regularly assist clients in rectifying compliance breaches promptly.
What Does It Cost to Set Up and Run an SMSF?
Understanding costs is crucial to ensure an SMSF is viable for you:
- Setup costs: $1,000–$2,500
- Annual audit: $300–$800
- SMSF tax return: $1,000–$2,000
- ATO levy: $259 annually
Generally, SMSFs are cost-effective with balances above $200,000.
Key Risks of DIY Setup
Self-managed setups can lead to compliance errors and penalties. Proper guidance from Origin BC can prevent costly mistakes.
How Origin Business Consultants Simplifies SMSF Setup
We offer comprehensive support-trust deed creation, registration, investment strategies, audits, and ongoing compliance.
Book Your SMSF Readiness Consultation
Ready to establish your SMSF with clarity and confidence? Our experienced accountants are here to guide you.
Speak to our SMSF specialists today.
Disclaimer: This content is general information only and is not intended to be financial advice. Origin Business Consultants does not hold an Australian Financial Services Licence (AFSL) and cannot provide investment advice. You should consult a licensed financial adviser before making decisions about your superannuation.
