I have decided to take the plunge and do my SMSF. I have decided to use Corporate Trustee, and use eCompany for registering my company, and the smsf will be using eSuper. I create this thread for a venue to ask question and hopefully others can find it useful too. Thank You in advance
Q. Can the cost of setting up the company be reimbursed by my SMSf? The company will be solely use for SMSF purpose. How about the ASIC annual fee of $44?
What is the ongoing costs involved ? Does a SMSF have to have an ABN/ACN ? Does the gov still contribute when you make voluntary deposits?
Audit costs per year + annual ASIC fee & yes SMSF has an ABN and ACN at least for a corporate trustee SMSF
I have a "shelf company" (which has an ACN) of which I am sole director which acts in trust for the SMSF. With regards to receipts, I have an accountant (where the shelf company is registered) whom looks after the account & organises the Audits/ASIC requirements/updates to the company constitution etc for a nominal fee for like $110/year. This is because she uses "Xero" cloud accounting software that automatically uplinks data from my SMSF bank account. This feeds to the auditor so all incoming/outgoings can be seen without hardcopies. When an invoice comes in, I pay it via direct debit from my SMSF's bank account. It's the cost of running the Fund, in the same way Industry funds extract running costs. "There's nothing to 'claim' at the end of the year" (although, yes I do keep the receipts/invoices at my home just in case) Accounting for my SMSF is pretty simple... a constant feed of income (plus any interest) but no out goings until I save up enough for a purchase (Shares, PM's or Term Deposit) or have one of two invoices; 1 for the auditor and 1 for the accountants' fee. So it's like 3 transactions a year in/out. Pretty easy to keep track of. With set-up and ongoing fees, if you don't pay for these out of your SMSF bank account (i.e. out of your pocket/normal savings account) it is considered as an additional contribution.
When I asked sammysilver at last meet he said it's in the range of $700 a year (if I am remembering that correctly). Is it really that high?
My last audit cost $440... accountant said that's pretty normal...however she's hunting around for a new one. If I wasn't 'mates' with my accountant, running costs would be considerably higher, I do keep her & her hubby well supplied with fresh seafood and game meat though
If you are satisfied that a cost is chargeable to your SMSF, use the ANZ account you get via eSuper to make the payment; then it will automatically be included in the EoY cost allocation shuffle. Note: I find ANZ a PITA in that it does not retain more than a few months of searchable data online - be organised and keep a complete spreadsheet or statement file of all transactions.
I think technically the Fund cannot claim these company expenses, but it is common practice for these to be claimed in the fund. In short, claim them and there shouldn't be a problem.
Ongoing costs for the Corporate trustee once established are the annual ASIC fee and that is all (about $44 a year - indexed to rise by a few dollars every year). The corporate trustee (because it is a company) will have an ACN but doesn't need any other registrations and doesn't lodge a tax return. The trust (SMSF) will have to get an ABN and a TFN but because it is a trust doesn't have an ACN. Ongoing costs for the trust (the SMSF itself) are accountancy fees for completing the financials and tax return and audit costs for auditing those financials. This does vary depending on complexity and whether you want to engage an accountant or do them yourself. I've completed accounts and tax returns for clients and the accountancy was circa $6,500 (plus audit) and they said to me that was good value and considerably less than they thought it would be. I've also completed accounts and tax returns that were $330. It really depends on what you do in your fund and the level of complexity. See this link https://www.ato.gov.au/individuals/super/in-detail/contributions/super-co-contribution/ Government may contribute to a max of $500 Edit to add - there is also the ATO Supervisory levy charged in the tax return details here: https://www.ato.gov.au/rates/smsf-supervisory-levy---2013-to-2016-financial-years/
Hi bloomst, Congrats on making the step in the SMSF direction....There are now 1 million members of SMSFs. For the set up cost, we bill the client on the day of the set up, and the costs are reimbursed once the rollover is complete. I will emphasise that the reimbursement should occur immediately upon receipt of the rollover into the bank account. With internet banking include a description 're-imbursement of set up" and we provide our clients with documentation or minutes to support the reimbursement in the event of ATO Audit, however generally auditors will accept the reimbursement. Happy to provide the tax rulings as support. The sole purpose of the company is to act as trustee of the SMSF. It is not a breach to use the trustee for personal business, however, strongly discouraged. As a special purpose company your Annual fee is discounted to $44.... Cheers Ivan
Hi BIGs, Further to the other post, the SMSF should have a corporate trustee. The SMSF will apply for and receive a ABN and TFN. In regards to ongoing costs, it really depends on your preference and the additional service or value add you would like to receive. For a 'no frills' approach Esuper is the cheapest or the middle of the range, we charge $1080 fixed, a few forum members will tell you the difference in service between Esuper and Redwood Advisory Hope that helps. Cheers, Ivan
G'day Clawhammer, Audits are real competitive these days. Back in 2000-2005 we were charging $1000 for a SMSF audits, these days with the outsourcing to India, audits are being done for $100 (yep I have seen them). Our independent audits are done for around $325-375 for vanilla funds and around $500 for LRBA. We are proud to be Australian - no Outsourcing. Quality is important - as long as your getting the right service then the price above is reasonable. Cheers, Ivan
Q, Insurance, what type of insurance and from where? I don't plan to get a loan to invest in shares/property, so does it worth getting insurance? Will the insurance cost meet the sole purpose test and can be reimbursed by smsf?
Hey there, a smsf is not required to have insurance, however you are required to 'consider insurance'....best to get a quote from a broker and see what the cost will be. The premiums are deductible to the SMSF. Cheers, Ivan
Legislatively all super funds need to consider insurance for members. If you don't want life insurance for yourself in your super, you need a meeting and record a Minute noting the decision being made. The legislation on insurance on super members has had the real world effect of everyone in the big funds in a default option, or newly into the fund moved automatically to a default option, has insurance premiums withdrawn from their money - whether they want it or not. Another type of insurance the fund must consider is insurance on collectibles such as art, cars, wine etc. I think that is mandatory from now or 1st July 2014. Can't remember.
Letter of Compliance I think I am on the last state of getting everything completed. I hand in the Choice form to my work (to change where the super contribution to be paid to), and Payroll insist on having the Letter of Compliance from ATO. They said they can't just changed it without the LoC. But then I read on the eSuper pack, that you only get the LoC after you submit end of year return, which obviously I haven't got one. I further read on the pack from eSuper that it is off their hand if my employer insist on getting the LoC first, and eSuper recommend to contact the Ombudsman if this is the case. I'm planning to bring all the paperwork to show payroll that it is genuine, but I have the feeling that they will still insist on seeing the LoC first. I look around the ATO website, and had no luck to find any reference on LoC. Has anyone encountered this before? and what did you do? Is there any reference readily available regarding this that I can print off and bring to work? Cheers
Go here and put in the fund ABN. It will show the fund is a 'complying fund'. Print it and send it with the other information. http://superfundlookup.gov.au It annoys me greatly that the fund you are trying to transfer out of can't go to a website and do this themselves.
