Setting up a Self-Managed Superannuation Fund (SMSF) can be a smart financial move, providing you with greater control over your retirement savings. But before you embark on this journey, it's crucial to understand the costs involved in establishing an SMSF. In this article, we'll explore the various expenses associated with setting up an SMSF and provide a general breakdown of the costs you can expect.
How Much Does it Cost to Set Up a SMSF?
The costs of setting up an SMSF can vary based on several factors, including the type of trustee structure, fund complexity, and the services you opt for. Below are some common expenses you can anticipate when establishing your SMSF.
SMSF Trust Deeds
Every SMSF setup requires a trust deed. The trust deed is a legal document outlining the rules and regulations of your SMSF. Costs for the legal documents for setting up an SMSF typically range from $1,450 to $4,850 depending on your fund's structure.
- Option 1: Individual Trustee structure – $1,450 GST inclusive (each member is a trustee)
- Option 2: Corporate Trustee structure – $2,750 GST inclusive (a company is established to act as trustee for the SMSF and all members are directors, this is the recommended structure for SMSFs)
- Option 3: LRBA – $2,100 GST inclusive. If borrowing to buy property you will also be required to establish a limited recourse borrowing structure . This involves documentation to establish the bare trust deed and custodian company.
Remember that these figures are approximate and may vary depending on your specific circumstances and who you choose to provide SMSF administration services . It’s essential to conduct thorough research, seek professional advice, and carefully assess your financial capacity before proceeding with an SMSF setup .
ATO Supervisory Levy
Self-managed super funds (SMSFs) have to pay the SMSF supervisory levy annually. The levy has been $259 since the 2014–15 financial year and remains the same for the current financial year. The levy is included in the preparation of the SMSF tax return and payable on the SMSF return due date.
SMSF Accounting and Audit Fees
Apart from the initial setup expenses, keep in mind the ongoing costs of managing your SMSF. These may include investment fees, administration fees, and audit fees.
BlueRock’s fixed-fee SMSF accounting service starts from $2,000 and takes care of all your SMSF administration on a monthly basis, including:
- Annual SMSF financials
- Tax return preparation and lodgement
- Member statements
- Independent audit
- Access to an SMSF accountant for general information.
SMSF Investment and Strategic Advisory Fees
Many SMSF trustees opt to enlist professionals such as financial advisors to assist with the setup and ongoing investment advice relating to their SMSF. Professional fees can vary, ranging from $2,500 to $10,000, depending on scope and depth of the advice services and expertise required.
Talk to an SMSF Accountant at BlueRock
Establishing a Self-Managed Superannuation Fund gives you control over your retirement planning, but it’s not for everyone. We ensure you’re well-informed about the strategy and the costs involved, and if you do want to set up an SMSF , we can help with everything from SMSF accounting to SMSF audits and SMSF investment advice. We also stay updated with the latest regulations and compliance requirements to ensure your SMSF remains compliant and effective. Reach out for a free consultation with one of our experienced SMSF accountants.
