self managed super fund (SMSF) is a superannuation trust structure that provides benefits to its members upon retirement. The main difference between SMSFs and other super funds is that SMSF members are also the trustees of the fund. SMSFs can have between one and four members, and one of the main advantages is the level of control that trustees have when it comes to tailoring the fund to meet their individual needs.

How does an SMSF work?

SMSFs are established for the sole purpose of providing financial benefits to members in retirement and their beneficiaries on death. They have their own Tax File Number (TFN), Australian Business Number (ABN) and transactional bank account, which allows them to receive contributions and rollovers, make investments and pay out lump sums and pensions. All SMSF investments are made in the name of the fund and are controlled by the trustees. As a trust, an SMSF requires a trustee. There are two trustee structure options:

  1. Corporate trustee – a company acts as the trustee and each member is a director. This structure allows simpler recording and registering of assets, providing administration efficiencies and flexibility in membership. Company establishment and ongoing fees are applicable with this structure.
  2. Individual trustee – each member is appointed as a trustee, with a minimum of two trustees required.

What are your responsibilities as an SMSF trustee?

As an SMSF trustee, you are responsible for making investment decisions and ensuring implementation of an investment strategy for your fund. SMSFs also have strict administrative obligations that require you to maintain records, provide financial statements, complete a tax return and organise an independent audit. For this reason, many trustees engage SMSF specialists to help them manage their accounting, auditing and tax reporting, as well as provide financial and investment advice. However, they always remain completely responsible for the decisions and administration of their fund.

How we can help support you as an SMSF trustee

At E&P, our SMSF Accounting team support trustees of SMSFs with preparing financial statements and tax returns, coordinating the annual audit and actuarial certificates, commencing and maintaining pension accounts and liaising with the Australian Tax Office (ATO) and the Australian Securities and Investments Commission (ASIC).

If you’re considering an SMSF and looking for accounting and administration support, E&P may be able to help you.

Contact us to find out more about our SMSF Accounting service.