The Complete Guide to Setting Up an SMSF in Australia (2025)

A self-managed super fund (SMSF) is the fastest-growing segment of Australia’s superannuation system. More than one million Australians have chosen to run their own fund, giving them greater control over where their retirement savings are invested, from ASX shares and ETFs through to property and even international markets. But before you can start investing, you’ll need to understand how an SMSF works, what’s required to establish one, and how it compares with other types of super funds.

In this guide, we’ll walk through every step of the SMSF setup process: who can have one, legal and compliance requirements, costs, providers, and finally how to open a brokerage account to trade ASX and US shares through your SMSF.

SMSF Basics

What is an SMSF?

An SMSF (self-managed super fund) is a private superannuation fund that you manage yourself, rather than relying on a retail or industry fund. Unlike other funds, the members of an SMSF are also its trustees, which means they are directly responsible for all investment decisions, record keeping, and compliance with superannuation law.

An SMSF can have up to six members. These members can be family members or business partners, and they pool their retirement savings into the fund. The flexibility of an SMSF allows trustees to invest in a wider range of assets than most traditional funds, including direct ASX shares, overseas equities, managed funds, property, and fixed income products.

Who Can Have an SMSF?

Not everyone is suited to running an SMSF. To be eligible, members must:

• Be 18 years or older (minors can be members under special arrangements).
• Be an Australian resident (to maintain fund compliance).
• Agree to act as a trustee and take on legal responsibility for the fund.

An SMSF can have between one and six members, and all members must generally be trustees (or directors if the SMSF uses a corporate trustee structure). This ensures that everyone shares responsibility for the fund’s operation.

Family SMSFs are common, where spouses or multiple generations pool their superannuation balances into one fund. This can help reduce costs and create a larger investment pool, but it also requires trust and cooperation between members.

Why Set Up an SMSF?

Australians set up SMSFs for a few key reasons:

1. Control: Trustees choose where their super is invested, whether that’s blue-chip ASX shares, US tech giants, or property.
2. Flexibility: SMSFs can hold a much broader range of assets than industry or retail funds.
3. Tax efficiency: Trustees can design strategies for franking credits, capital gains tax timing, or pension phase tax concessions.
4. Estate planning: SMSFs allow more direct control over how benefits are passed on to beneficiaries.

However, with control comes responsibility. Trustees must follow strict superannuation rules, maintain records, arrange an annual audit, and ensure the fund complies with all ATO requirements. An SMSF can deliver benefits for the right people, but it isn’t the best fit for everyone.

What is Required to Start an SMSF?

Setting up an SMSF requires several key elements:

• Trustees: You must decide whether the fund will have individual trustees or a corporate trustee (a company acting as trustee).
• Trust deed: A legal document that sets out the rules of the fund, including how contributions, investments, and benefits are handled.
• Bank account: An SMSF needs its own bank account to accept rollovers and contributions, and to pay fund expenses.
• Registration: The SMSF must be registered with the Australian Taxation Office (ATO) to receive concessional tax treatment.
• Investment strategy: Trustees must prepare a written investment strategy outlining how the fund will achieve its retirement objectives.

Most importantly, the ATO recommends that an SMSF only becomes cost-effective once balances exceed around $200,000. Below this level, annual audit and administration fees may outweigh the benefits of control.

SMSF Key Considerations at a Glance

An SMSF is flexible, but there are important rules and trade-offs to understand before deciding if it’s right for you.

How many members can an SMSF have?
An SMSF can have up to six members. These members combine their super balances into one fund and share responsibility for running it.

Can family members run one SMSF together?
Yes. Family SMSFs are common, where spouses, siblings, or multiple generations pool their funds. This can reduce costs and create a larger investment pool, but it requires trust and cooperation between members.

Why do people set up SMSFs instead of using retail or industry funds?
The main reasons are control, flexibility, and tax planning. SMSFs allow trustees to pick their own investments, whether ASX shares, US stocks, property, or term deposits, and to design strategies around tax efficiency and estate planning.

What are the risks of running an SMSF?
Running an SMSF comes with legal responsibilities, annual reporting obligations, and potential penalties if compliance rules are breached. Trustees must be confident managing investments, keeping records, and arranging audits. Without the right level of balance and commitment, an SMSF can become costly and time-consuming compared to traditional funds.

What is Required to Start an SMSF?

Before an SMSF can be established, there are a number of requirements that every trustee must meet. These ensure the fund is set up legally and can qualify for the tax concessions that apply to superannuation.

What are the Trustee Requirements for an SMSF? (Individual vs Corporate Trustee)

Every SMSF must have trustees, as they are legally responsible for running the fund. There are two structures to choose from:

• Individual Trustees: Each member of the SMSF is also a trustee. If new members join or existing members leave, the fund’s ownership documents (such as asset titles) must be updated, which can be time-consuming and costly.
• Corporate Trustee: A company is established to act as trustee, and each SMSF member is a director of that company. This option costs more to set up but provides greater flexibility, simpler administration when membership changes, and stronger asset protection.

The decision between individual and corporate trustees is one of the first, and most important, choices you’ll make when setting up an SMSF.

What Documents Do I Need to Establish an SMSF?

Trust Deed

An SMSF must be established with a trust deed. This legal document outlines the rules of the fund, how contributions are made, how benefits are paid, and how investments are managed. It’s the foundation of the SMSF and should be prepared by a professional to avoid compliance issues.

Trustee Declarations

Trustees must sign a declaration acknowledging they understand their legal responsibilities.

Bank Account

The SMSF requires its own bank account. This separates fund money from personal finances, allowing contributions, rollovers, investment income, and expenses to be managed clearly and transparently.

Registration with the ATO

The SMSF must be registered with the Australian Taxation Office. Registration provides the fund with a Tax File Number (TFN) and an Australian Business Number (ABN), which are necessary for tax reporting and concessional tax treatment.

Company Documents (if using a corporate trustee)

ASIC registration details, company constitution, and director consents.

Having these documents prepared correctly from the outset is essential to avoid compliance problems later.

Investment Strategy

Trustees must prepare a written investment strategy. This document shows how the SMSF intends to meet its retirement objectives, taking into account risk, diversification, liquidity, and insurance. The ATO requires trustees to review this strategy regularly.

Minimum Balance – How much money do you need to start an SMSF?

While the law does not set a minimum, the ATO suggests an SMSF generally becomes cost-effective once it holds around $200,000 or more. This is because annual audit and compliance costs are fixed, so a larger balance spreads these costs more effectively.

One question to ask when it comes to the minimum balance, is “will you “Will I be better off with an SMSF after fees, compared to an industry super fund?”

To answer that, you would need to have an idea of your likely returns, coupled with the expected fees compared to the industry super fund charges.

Do You Need a Company to Set Up an SMSF?

No, you don’t have to establish a company to set up an SMSF, but you may choose to if you want a corporate trustee structure. Many SMSFs start with individual trustees to save money, but a corporate trustee can simplify administration in the long term.

For example, if an individual trustee leaves or a new member joins, you must update the fund’s ownership records for all assets (e.g. share registries, property titles). With a corporate trustee, changes in membership only require updating company records, not asset ownership, which can save time and cost.

While not mandatory, setting up a company for your SMSF is often recommended for families or groups who expect membership changes over time.

How Long Does It Take to Establish an SMSF?

The time required to set up an SMSF depends on the complexity of your structure and the speed at which documents are prepared. In general:

• Drafting the trust deed and trustee documents can take a few days to a week.
• ASIC registration for a corporate trustee company (if required) is usually completed within 24–48 hours.
• Registering the SMSF with the ATO typically takes 2–3 weeks.
• Opening a bank account and rolling over super balances can take an additional 1–2 weeks.

In most cases, you can expect the entire process to take 3–6 weeks from start to finish. Once the SMSF is registered and funded, you can then open a brokerage account to begin investing in ASX and international shares.

Legal & Compliance for SMSFs

Running an SMSF comes with significant legal responsibilities. Trustees are personally accountable for making sure the fund complies with superannuation law, taxation rules, and reporting requirements. Below we cover the key legal and compliance obligations every SMSF trustee needs to know.

What Laws Govern SMSFs in Australia?

SMSFs are regulated under the Superannuation Industry (Supervision) Act 1993 (SIS Act). This legislation sets out the rules that all superannuation funds, including SMSFs, must follow. The Act is designed to ensure superannuation savings are managed for the sole purpose of providing retirement benefits to members.

The Australian Taxation Office (ATO) is the primary regulator of SMSFs. It monitors compliance, receives annual reports, and has the power to impose penalties if trustees breach the law.

What Are Trustee Responsibilities and Penalties?

Trustees of an SMSF are ultimately responsible for all decisions made by the fund. This includes:

• Following the SMSF trust deed.
• Preparing and reviewing an investment strategy.
• Keeping accurate financial and compliance records.
• Ensuring the fund only makes investments that meet the “sole purpose test” (benefit for retirement).
• Arranging an independent annual audit.

Failure to meet these responsibilities can result in serious penalties. The ATO can issue fines, disqualify trustees, or even make an SMSF non-compliant, which removes its concessional tax treatment. Trustees can also face personal liability for losses if rules are breached.

What Are the Annual Reporting Requirements?

Every SMSF must submit an SMSF Annual Return to the ATO. This includes:

• Financial statements.
• The fund’s income tax return.
• Details of contributions, rollovers, and benefit payments.
• Information about the fund’s assets and investments.

Trustees must also pay the ATO supervisory levy each year, which helps cover the cost of SMSF regulation.

Who Audits an SMSF?

Each SMSF is required to have its financial statements independently audited every year by an approved SMSF auditor. The auditor reviews both the financial records and compliance with superannuation law. This process helps ensure that trustees are meeting their obligations and provides an additional safeguard for members’ retirement savings.

What Happens if You Make a Mistake with Your SMSF?

Mistakes can range from administrative errors to more serious compliance breaches. Common issues include:

• Late lodgement of the annual return.
• Lending money to members or related parties.
• Incorrect recording of contributions or rollovers.
• Investing in assets that don’t meet the sole purpose test.

If a mistake is identified, the ATO may issue education directions, fines, or enforce corrective action. In serious cases, the fund can be made non-compliant, resulting in a tax rate of 45% on its income.

Trustees who identify a mistake early should seek advice from an SMSF accountant or administrator and rectify the issue promptly. Being proactive can often reduce the severity of penalties.

SMSF vs Other Super Funds

When deciding on a superannuation structure, most Australians compare an SMSF with either an industry super fund or a retail fund. Each option has its strengths, but the choice depends on your balance, your appetite for responsibility, and how much control you want over your investments.

How Does an SMSF Compare to an Industry Super Fund?

An industry super fund is managed on behalf of members, with professional investment managers making all the decisions. Fees are usually a percentage of your balance, and investment options are limited to a range of pre-set strategies such as “balanced,” “growth,” or “conservative.”

An SMSF, by contrast, puts the responsibility in the hands of its members. Trustees decide where the money is invested, giving much more freedom, from direct ASX shares to property or international equities. However, with that freedom comes the responsibility for compliance, record keeping, and administration.

Is an SMSF Cheaper or More Expensive to Run?

The cost of running an SMSF depends on the balance of the fund and the services used. Industry and retail funds usually charge percentage-based fees, meaning the larger your balance, the higher the dollar cost.

SMSFs often have flat annual costs, including accounting, audit, and ATO levies, which can range from a few thousand dollars per year. This means that for balances above about $200,000, an SMSF can be cost-effective compared to industry funds. But for smaller balances, the fixed fees may outweigh the benefits.

Can an SMSF Perform Better Than a Retail or Industry Super Fund?

An SMSF does not automatically perform better than an industry or retail super fund, performance depends entirely on the investment decisions made by the trustees.

For example, an SMSF trustee may choose to focus heavily on high-dividend ASX shares, global technology stocks, or even property. This flexibility can lead to outperformance if investments are well chosen, but it also carries the risk of underperformance if poor decisions are made.

Industry and retail funds, by contrast, rely on diversified portfolios managed by professionals, which may deliver more consistent results but with less upside potential.

What Control Do SMSF Trustees Have Over Investments?

Control is the main reason many Australians choose an SMSF. Trustees can:

• Buy and sell direct ASX shares.
• Invest in international shares (such as US markets).
• Hold property, fixed income, or managed funds.
• Structure investments to suit their risk profile and retirement goals.

This control extends to tax planning, estate planning, and timing of asset sales, giving trustees a level of flexibility that isn’t possible in industry or retail funds.

SMSF Providers in Australia

Setting up an SMSF isn’t something most people do entirely on their own. While trustees are ultimately responsible for the fund, professional support is often needed to make sure the fund is established correctly and remains compliant with ATO rules.

Who Helps Set Up an SMSF?

Several types of professionals and service providers can assist with SMSF setup:

• Accountants: handle the initial trust deed, registrations, and ongoing tax reporting.
• Lawyers: prepare or review the trust deed and corporate trustee documents.
• SMSF Administrators: provide “end-to-end” packages that include setup, compliance, and annual reporting.
• Financial Advisers: may guide investment strategy and suitability (although trustees make the final decisions).

Many Australians choose a combination of these services depending on their needs and budget.

Who Are the Major SMSF Setup Providers in Australia?

There are several well-known SMSF service providers offering online and full-service packages:

• Heffron: specialist SMSF administrators with tailored solutions.
• SuperConcepts: one of the largest independent SMSF administrators in Australia.
• ESUPERFUND: online-focused, low-cost SMSF setup and admin service.
• AMP SMSF Solutions: offers SMSF administration backed by a large institution.
• Xpress Super: streamlined setup and low-cost ongoing admin.
• SuperGuardian: boutique SMSF administration with personalised service.
• Smarter SMSF: specialises in documentation and compliance support.

Can You Set Up an SMSF Online?

Yes, many providers now allow you to complete the SMSF setup process online. This usually includes:

• Selecting your trustee structure (individual vs corporate).
• Completing online forms for the trust deed.
• Lodging ATO registration for TFN and ABN.
• Setting up an SMSF bank account.

Online setup services are fast and cost-effective, but trustees should be mindful that they are still legally responsible for compliance.

How Much Does It Cost to Set Up an SMSF?

Setup costs vary depending on the provider and whether you choose an individual or corporate trustee structure. Typical costs include:

• Trust deed & documents: $500 – $2,000
• Corporate trustee (if required): $1,000 – $2,000 for ASIC registration and company setup
• Professional advice (optional): $1,000+ depending on complexity

Some online providers advertise “low-cost” packages starting under $1,000, but ongoing administration, audit, and compliance fees must also be factored in. In most cases, total setup costs range from $1,000 – $3,000, depending on your structure and the level of professional support required.

What Can You Invest in with an SMSF?

One of the biggest attractions of an SMSF is the wide range of investment options available. Some assets require additional documentation and reasoning such as being detailed in the investment strategy and in some cases additional documentation is required (like a derivatives risk statement), so it’s important you have the right documentation in place before proceeding. Unlike retail or industry funds, which limit members to pre-set investment strategies, SMSFs allow trustees to choose directly from:

US Shares and International Equities

Trustees can diversify globally by investing in US and international markets. This is done through an SMSF brokerage account, which typically requires completion of a W-8BEN form to manage withholding tax obligations. Access to global stocks provides opportunities to invest in major companies like Apple, Microsoft, or Tesla, giving SMSFs broader exposure than most traditional funds.

Exchange-Traded Funds (ETFs)

ETFs are a popular choice for SMSFs because they provide instant diversification at low cost. With one trade, trustees can gain exposure to entire markets, industries, or investment themes, from Australian index funds to global technology ETFs.

Term Deposits and Cash

Cash and term deposits provide lower-risk investment options for SMSFs. They can be used to preserve capital, manage liquidity, or balance higher-risk investments like shares or property.

Managed Funds and LICs

SMSFs may also invest in managed funds or Listed Investment Companies (LICs), giving trustees access to professionally managed portfolios. This option suits trustees who want exposure to a broader range of assets but prefer an outsourced management style.

Cryptocurrency

SMSFs can invest in cryptocurrencies such as Bitcoin, but these investments are heavily scrutinised by the ATO. Trustees must ensure the investment complies with the sole purpose test, is held in the fund’s name, and is properly recorded and valued. Due to volatility and compliance requirements, crypto is considered a high-risk SMSF investment.

Can You Buy Property in Your SMSF?

Yes, SMSFs can invest in property, but there are important restrictions:

• The property must meet the sole purpose test, meaning it must provide retirement benefits, not personal use.
• Residential property cannot be lived in by fund members or related parties.
• Commercial property can be leased to a related party (for example, a business owner leasing their office from the SMSF), but it must be at market rates and properly documented.

Property investing can diversify an SMSF portfolio, but it usually requires significant capital and careful structuring. Property can be purchased outright or via a borrowing structure such as a Limited Recourse Borrowing Arrangement (LRBA), although this adds complexity and compliance requirements.

What Are the Restrictions on SMSF Investments?

While SMSFs have flexibility, they must follow strict rules:

• Sole purpose test: All investments must be made to provide retirement benefits for members.
• No personal use: SMSF assets (like property or collectibles) cannot be used by members or related parties.
• Arms-length transactions: All dealings must be at market value, no favourable terms for members or relatives.
• Diversification: Trustees must consider diversification and liquidity in their investment strategy.
• In-house asset rules: SMSFs can’t invest more than 5% of their assets in related parties (e.g., your own company).

Failure to follow these rules can lead to the SMSF being made non-compliant, which can result in severe tax penalties.

SMSF and Shares

For many Australians, the main reason to establish an SMSF is the ability to invest directly in shares. Unlike retail or industry funds, which generally only offer pooled investment options, an SMSF allows trustees to build their own portfolio of Australian and international stocks.

Can an SMSF Buy Direct ASX Shares?

Yes. SMSFs can purchase shares in companies listed on the Australian Securities Exchange (ASX). This gives trustees access to:

• Blue-chip companies such as the major banks and BHP.
• Dividend-paying stocks, with the added benefit of franking credits.
• ETFs and LICs listed on the ASX for instant diversification.

Direct ownership of shares is one of the most popular investment choices for SMSFs because it allows members to take control of their retirement savings while also managing tax outcomes.

Can an SMSF Invest in US Shares?

Yes, SMSFs can also invest in US-listed companies, provided they open a brokerage account with international market access. This enables trustees to buy shares in global leaders such as Apple, Microsoft, Amazon, or Tesla, as well as ETFs traded on US exchanges.

Investing overseas helps SMSFs diversify beyond the Australian market and capture opportunities in sectors underrepresented on the ASX, such as global technology and healthcare.

What Forms Are Required for US Shares?

To invest in US markets, SMSF trustees must complete a W-8BEN form. This form is submitted to the broker and ensures the correct rate of US withholding tax is applied to dividends. Without it, higher tax rates may be deducted at source.

The W-8BEN form is usually valid for three years and must be kept up to date to maintain compliance.

Which Brokers Offer SMSF Accounts?

At Macro Global Markets, we offer SMSF brokerage accounts that allow trustees to trade both ASX and US shares with ease. Our platform is designed for investors who want direct market access, competitive pricing, and the reporting features needed to stay compliant.

Our costs are lower than competitors, our training is beginner friendly with the ability to progress to advanced training at no extra cost. We care about our client’s success.

Practical How-To: Setting Up an SMSF

Setting up an SMSF may sound complex, but the process can be broken down into a series of manageable steps. Below is a straightforward guide that takes you from the initial trustee decision all the way to opening a brokerage account.

Step-by-Step SMSF Setup Process

Here’s the typical order of events when creating an SMSF:

1. Decide on the trustee structure (individual vs corporate).
2. Prepare and sign the SMSF trust deed.
3. Register the SMSF with the ATO to obtain a TFN and ABN.
4. Open a dedicated SMSF bank account.
5. Rollover existing superannuation balances into the SMSF.
6. Develop a written investment strategy.
7. Open an SMSF brokerage account to start investing.

How to Choose Between a Corporate Trustee vs Individual Trustee

• Individual Trustees: Each member is personally listed as a trustee. This is cheaper upfront but creates more paperwork when members join or leave, as asset titles must be updated.
• Corporate Trustee: A company acts as the trustee, and members are directors. While setup costs more, it simplifies administration, strengthens asset protection, and is generally recommended for long-term SMSFs.

Your choice will depend on budget, expected membership changes, and how much flexibility you want in managing the fund.

How to Rollover Existing Super into an SMSF

Once your SMSF is registered, you can transfer money from your existing retail or industry super account into the fund. This process involves:

• Requesting a rollover from your current super provider.
• Providing your SMSF’s bank account details and ABN.
• Ensuring the transfer goes directly into the SMSF bank account.

It’s important to keep all paperwork and records, as these will be needed for annual reporting and audits.

How to Set Up a Bank Account for an SMSF

An SMSF must have a separate bank account in its own name to:

• Receive contributions and rollovers.
• Pay fund expenses (such as audits or ATO levies).
• Hold investment income (dividends, interest, rent).

Banks usually require the SMSF trust deed, trustee details, and identification documents. This account ensures SMSF money is clearly separated from personal finances, a key compliance rule.

How to Open a Brokerage Account for an SMSF

With the fund established and funded, the final step is opening a brokerage account. This allows the SMSF to buy and sell ASX and international shares.

When choosing a broker, SMSF trustees should consider:

• Access to both ASX and US markets.
• Competitive brokerage fees.
• Foreign exchange (FX) rates for international trades.
• Reporting tools designed for SMSF compliance.

At Macro Global Markets, we provide SMSF brokerage accounts with direct access to ASX and US shares, transparent fees, and the reporting support trustees need to stay compliant.

Costs & Ongoing Management of an SMSF

Running an SMSF gives trustees control, but it also comes with ongoing costs and responsibilities. Before setting one up, it’s important to understand the minimum balance typically required and the expenses involved in managing the fund.

What is the Minimum Balance Needed for an SMSF to be Cost-Effective?

While there is no legal minimum balance to establish an SMSF, the Australian Taxation Office (ATO) suggests that balances under $200,000 may not be cost-effective. This is because the fixed costs of running an SMSF, such as audits, ATO levies, and accounting fees, can take up a larger percentage of a smaller fund.

For example, if annual running costs are $3,000, that represents:

• 1.5% of a $200,000 balance (reasonable).
• 6% of a $50,000 balance (very high).

Most advisers recommend SMSFs for individuals or families with larger combined balances, where the benefits of control and flexibility outweigh the costs.

What Are the Ongoing SMSF Running Costs?

Typical annual expenses for an SMSF include:

• Audit Fees: Every SMSF must undergo an independent annual audit, usually costing between $300 – $600.
• Accounting & Administration Fees: Preparing financial statements, tax returns, and compliance reports may cost $1,000 – $3,000+ depending on complexity.
• ATO Supervisory Levy: A fixed annual fee of $259 (2025 rate).
• ASIC Fees: If using a corporate trustee, annual company fees apply.
• Brokerage & Investment Costs: Brokerage fees for buying/selling shares (typically $5 – $20 per trade), foreign exchange costs for US shares, and management fees if investing in ETFs or managed funds.

In total, most SMSFs can expect annual running costs to range between $2,000 and $5,000, although more complex funds may cost more.

Can You Manage an SMSF Yourself Without a Financial Adviser?

Yes, many trustees choose to manage their SMSF without an ongoing financial adviser. However, this requires:

• Confidence in making investment decisions.
• An understanding of superannuation law and compliance.
• Commitment to record keeping and arranging annual audits.

While professional advisers can add value through tax planning, retirement strategies, or investment advice, they are not mandatory. Many trustees choose to keep costs down by handling strategy and investments themselves while outsourcing only the legal and compliance requirements.

This is where a broker like Macro Global Markets fits in, providing SMSFs with the tools and market access to execute their own investment strategies efficiently, with transparent costs and compliance-ready reporting.

SMSF FAQs

SMSFs give trustees significant flexibility, but they also come with complex rules that raise common questions. Below are answers to some of the most frequently asked advanced questions about running an SMSF.

Can an SMSF Hold International Shares?

Yes. SMSFs can invest in overseas equities, including US-listed companies, as long as the investment complies with the sole purpose test (providing retirement benefits). To access international markets, trustees need a broker that offers global share trading and must complete compliance forms such as the W-8BEN for US shares.

International exposure helps SMSFs diversify beyond the Australian market, which is heavily weighted toward financials and resources.

What Happens to Your SMSF When You Retire?

When members reach retirement age, the SMSF can move from the accumulation phase to the pension phase. In this phase:

• Earnings on pension assets may be tax-free.
• Trustees can start paying themselves a retirement income stream.
• The fund continues to operate, but its purpose shifts from growing savings to distributing benefits.

Trustees must ensure pension payments meet minimum drawdown requirements set by the ATO.

What Happens if an SMSF Member Dies?

When a member passes away, their super balance becomes a death benefit. The trust deed of the SMSF determines how this benefit is distributed, either to dependents, a spouse, or via the deceased member’s estate.

Trustees must carefully follow both the deed and superannuation law when handling death benefits. Having a binding death benefit nomination (BDBN) in place is highly recommended to ensure the member’s wishes are followed.

Can You Shut Down an SMSF? (Winding Up an SMSF Process)

Yes. Trustees can choose to wind up an SMSF if it no longer suits their needs. The process involves:

1. Paying out or rolling over all member benefits to another super fund.
2. Selling or transferring SMSF assets.
3. Completing a final set of financial statements and tax return.
4. Arranging a final independent audit.
5. Notifying the ATO that the SMSF has been wound up.

Once wound up, the SMSF cannot be reactivated, so the decision should be carefully considered.

What Happens if You Move Overseas and Have an SMSF?

SMSFs must remain an Australian super fund to qualify for tax concessions. If all members move overseas permanently, the fund may fail the residency test and lose its compliance status.

Options include:

• Appointing a resident trustee to maintain compliance.
• Rolling balances into a retail or industry super fund before departure.
• Winding up the SMSF if ongoing residency requirements cannot be met.

Trustees planning to move overseas should seek professional advice well in advance to avoid compliance risks.

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