Setting up a SMSF w/Corporate Trustee 101

Discussion in 'Superannuation' started by hiho, Nov 18, 2011.

  1. hiho

    hiho Active Member Silver Stacker

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    Hi guys, well I just went through the laborious task of setting up my SMSF and wanted to share with you the process. All in all it cost me $137.50 for the docs additionally I paid $476 for a SMSF company which became the trustee.

    So all in all it can be done for roughly $600 and about 8-15 hrs of your time dependant on your computer/internet literacy :) My Partner and I are directors of the SMSF Company and trustees of the SMSF.

    Firstly you need to setup the corporate trustee. I used http://www.acnregister.com.au because I had used them previously but again there are others.
    Then you need to get your docs, I used http://www.cleardocs.com/products-superannuation-trust.html but there are others around if you do a search, to set up the SMSF. This package comes with a step by step guide to completing the process it is really user friendly and has links to ATO website for applying for an ABN and all the forms for transferring your super etc
    Once the ABN arrives in the mail you can then setup a SMSF account, I used https://www.ubank.com.au/ub/web/smsf/smsf-usaver which again I was a customer of already but most banks have these facilities, you will need you company ABN and ACN to set this up, was a little tricky but I finally worked it out
    There's a fair bit of mucking about, getting copies of ID verified at the post office and so on but all said and done its worth saving the money
    It took 3 weeks all said and done and we have just sent off the request for transfer, so we wait with baited breath to get our hands on our money

    PS: I have no affiliations to the above companies I have listed however I thought it would be easier if you had a real world reference to look up?

    First Year Running, Audit and Return Costings
    BGL Software $431 renewal
    Audit of fund plus check of BGL software setup and entries $700
    Company ASIC admin Fee $230
    ATO Levy $200

    In total operating costs of $1561, which I believe is the cheapest option for me to do this independently.

    If you were purely in cash that would translate into a balance exceeding $36000 simply to keep fund ahead with a cash rate of 5% and tax of 15%, but not taking inflation into account. If you take inflation @ 3% into account you would require in excess of $120000 in the high interest account.
    These figures are approximate but important to consider when starting a SMSF, of course PM's, shares, other investments and property may make up your portfolio. My opinion is you should have a starting amount not less than $50k if you were to do it the way I have suggested.
    I do want to stress this is not financial advice as I am not qualified to advise. DYODD and remember with the cash rate falling and inflation remaining high your battle is even greater.
     
  2. Big A.D.

    Big A.D. Well-Known Member Silver Stacker

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    Thanks for sharing. Here's hoping your crash course inspires more people to take the initiative and set up their own SMSF.
     
  3. skipau

    skipau Member Silver Stacker

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    quick question... I see a lot of people opting for the esuperfund option... why did you go solo? I have just registered a corporate trustee myself.. but haven't committed to either solo, my accountant doing it, or esuperfund.... so would be interested in your thoughts...
     
  4. hiho

    hiho Active Member Silver Stacker

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    Skip I found the conditions of using esuperfund too onorous and higly linked to banks etc, I wanted an independant SMSF with no bells or whistles but every option to invest in all types of areas. all I can say is RTFP read the fine print
     
  5. Yippe-Ki-Ya

    Yippe-Ki-Ya New Member

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    What are the benefits of using a corporate trustee?
     
  6. Yippe-Ki-Ya

    Yippe-Ki-Ya New Member

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    just curious about that - could you maybe expand?

    I'm with esuper and am pretty happy with it. Just wanna know if i'm missing something though, so would appreciate it if you could give more detail?
     
  7. hiho

    hiho Active Member Silver Stacker

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  8. hiho

    hiho Active Member Silver Stacker

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    I have a book for you to read
     
  9. Yippe-Ki-Ya

    Yippe-Ki-Ya New Member

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    The ANZ-Plus account is simply there to receive/pay any monies into the fund. You are free to set up any other accounts with whoever you like and "invest" there if you prefer.
    They want you to have an ANZ account since it is easy for their system to see into these accounts and automatically get a listing of all transactions etc.. which makes it easier for you when it comes to supplying info for drawing up the accounting statements and tax returns for the fund - which esuper does for you.

    Personally i dont see an issue with this.

    The share trading account is there, but you dont need to use it. I've never used mine as i only invest in PMs through my fund.
    In fact you are free to invest in whatever you like - esuper simply assist you with drawing up the yearly returns etc which the ATO require by law.

    I guess what i'm trying to say is that I have found that my SMSF is completely "independant" as i make all the investment decisions.
    esuper simply help with the admin bullshit which is something one cannot and should not be worried about anyway. your job as trustee should be dedicated to making good investment decisions... nothing more nothing less!
     
  10. Yippe-Ki-Ya

    Yippe-Ki-Ya New Member

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    mate - if its that hard to explain then i'm glad i didn't bother :D
     
  11. hiho

    hiho Active Member Silver Stacker

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    A Corporate Trustee is good if you fall into the following categories:

    You are secretive and own lots of assets--------
    Don't want anyone to know what assets you own? A Corporate Trustee holds the assets in the name of the company. If someone does a land titles search using your name, they won't find the real estate held in your SMSF.

    The members of your SMSF change often----------
    Your members are the Trustees. So when a member changes, so do the Trustees. In this instance, you have to go back to the local titles office and transfer the property into the names of the new Trustees. There are generally no state duty or Capital Gains Tax issues to do this. But there are administrative costs to transfer.

    You love asset protection strategies--------------
    Assets in your SMSF are meant to be conservative they are there for your retirement not for speculation. Risky or not, I have had clients that have ended up with negative assets in their SMSF. Insolvency ensures that the Trustees of the SMSF can go down with the sinking ship.

    You pay land tax--------------
    In most States you pay a higher rate of land tax the more land you have. Therefore, if you and your wife already have a rental property then owning more land (as Trustee of the SMSF) increases the rate of land tax you pay. You can transfer the land out of your name into the name of your new company for no transfer duty and no Capital Gains Tax. (Get the help of a tax lawyer.)

    Corporate Trustees add expense and complication. Your Accountant is best to do the costs/benefit analysis.
     
  12. whitty

    whitty Member

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    Any idea on the ongoing costs associated with setting it up yourself?

    I know there's an annual fee for the trustee company, and $180 for ATO but what about audits etc?
     
  13. hiho

    hiho Active Member Silver Stacker

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    Not entirely sure mate, but aside from what you have detailed I believe its only the audit and lodgement costs. I have aquired BGL Superfund software to maintain the accounts so my costs are further reduced reagrding the administration, I have a wife who is an accountant so she can lodge the return on our behalf.
     
  14. skipau

    skipau Member Silver Stacker

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    Gotta get me one of them! Accountants in the family that is...
     
  15. Yippe-Ki-Ya

    Yippe-Ki-Ya New Member

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    I doubt this can be true. If your SMSF owns land that's got nothing to do with land owned in your private name.
    Being a trustee for a trust is similar to being a director of a company - whatever the trust/company owns is not seen as being owned in the private name of the trustee/director.
     
  16. Yippe-Ki-Ya

    Yippe-Ki-Ya New Member

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    Are you sure your wife (being a director of the trust company) would be deemed sufficiently independant to audit the fund's accounts?

    This would be similar to one of the trustees doing the audit - which i dont believe is allowed.
    the ATO can be full of it you know...
     
  17. hiho

    hiho Active Member Silver Stacker

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    without getting too technical, FK's
     
  18. hiho

    hiho Active Member Silver Stacker

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    not to do the audit yip, to do the return :) peace
     
  19. SilverSanchez

    SilverSanchez Active Member

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    Im just in the tail end of setting up my SMSF - we used a Corperate trustee - 4 members

    We are setting up a vault account with guardian in melbourne for storage of the physical

    Was wondering if there are any other options for storage - already checked out ABC and their insurance costs are way to high (because they are per ounce of gold and kg of silver, whereas Guardian is a flat rate according to insurance gross value needs) but i suppose if gold and silver skyrocket ABC will eventually be cheaper (unless they raise their per ounce/kg rate for insurance)

    anyone else have any insights into the storage requirements and insurance for physical?

    Our ongoing costs are $2000 per annum (for ATO fees, audit, taxes etc) + storage ($300 per annum)and insurance costs (about $450 per annum) = $2750 per annum (or $690 per member)
     
  20. Yippe-Ki-Ya

    Yippe-Ki-Ya New Member

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    what do you mean? not too good with the abbreviations mate :)
     

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