Self-managed super funds, set up properly

Who it is for

• People weighing up whether an SMSF suits them better than a retail or industry fund
• Couples and families (up to 6 members in one fund) who want to pool their super
• New trustees who need the fund, trustee structure and registration set up correctly
• Existing SMSF trustees who need annual accounts, financial statements and the fund's annual return prepared

With an SMSF, you are in charge

An SMSF is different from other super funds: the members are the trustees and run the fund for their own benefit. That means they are solely responsible for complying with the relevant law. Simply put, if you set up an SMSF, you are in charge.

The ATO describes an SMSF as a trust that exists for one purpose: providing retirement benefits to its members. Trustees stay personally responsible for compliance even when they rely on another trustee or pay professionals to help, and a failure to comply can lead to penalties, disqualification and tax consequences for the fund.

It is a big financial decision that takes time and skill. Come in and talk to our team about what is involved in running a fund. If you decide to go ahead, we can help you establish the fund and keep its accounts and tax returns in order.

Every trustee is responsible for the whole fund, including decisions made by the other trustees.

Members, trustees and the structure of the fund

An SMSF can have up to 6 members. The fund is run either by individual trustees or by a company acting as corporate trustee, and the choice affects paperwork, costs and what happens when someone joins, leaves or dies.

To be eligible, a trustee or director generally must be at least 18, not under a legal disability and not a disqualified person (for example, someone convicted of a dishonesty offence or an undischarged bankrupt). Each trustee consents in writing, and each must sign the ATO Trustee declaration within 21 days of being appointed.

Our guide to setting up an SMSF and trustee duties explains these choices in more detail, and our trusts page covers how trust structures work more generally.

Setting up and registering an SMSF

An SMSF is legally established once it has a trust deed, trustees and assets held for the members. From that point the ATO allows 60 days to register the fund by applying for an ABN and a tax file number through the Australian Business Register and electing for the fund to be regulated. A fund that is not registered does not receive the tax concessions, and employers cannot claim deductions for contributions to it.

Once the application is in, the fund needs its own bank account, an electronic service address (ESA), and a written investment strategy. Most SMSFs do not need to register for GST. Under the ATO's current guidance, registration is only required if the fund's GST turnover is more than $75,000, and contributions, interest, dividends and residential rent do not count towards that figure.

The rules trustees must follow

Trustees take on obligations under the Superannuation Industry (Supervision) Act 1993 and the fund's trust deed. The main ones are:

• Sole purpose test: the fund must be maintained only to provide retirement benefits to members, or death benefits if a member dies before retirement. Using fund assets personally, or buying a rental property so a related party can live in it, are examples of breaches.
• Investment strategy: a written strategy that considers every member's circumstances, investment objectives, liquidity, diversification and insurance, reviewed regularly, with records showing that investments follow it.
• Investment restrictions: in most cases the fund cannot acquire assets from or lend money to members or related parties, and cannot borrow money. Investments must be made on arm's length terms.
• Paying benefits: benefits can only be paid once a member meets a condition of release, and in line with the trust deed.
• Valuations and records: assets are valued at market value each year, financial records are kept for at least 5 years, and minutes, the trust deed, trustee consents and trustee declarations for at least 10 years.
• Notifying changes: the ATO must be told about certain changes, such as a change of trustee or director, within 28 days.

Every year: accounts, audit, annual return and levy

Each financial year (1 July to 30 June) the fund prepares a statement of financial position and an operating statement. These go to an independent SMSF auditor registered with ASIC, who must be appointed no later than 45 days before the annual return is due. An audit is needed even in a year with no contributions or payments, and trustees have 14 days to provide anything the auditor asks for.

Once the audit is finished, the fund lodges its SMSF annual return, which combines the income tax return, regulatory information and member contribution reporting. When a tax agent lodges the return, the due date comes from the tax agent lodgment program; for a fund's first year it is 28 February, unless the ATO reviewed the fund at registration, in which case it is 31 October. Funds lodging themselves generally have until 31 October if they are newly registered or have overdue returns from earlier years, and 28 February otherwise.

The supervisory levy is paid with the return. The ATO's lodgment page (last updated 24 August 2026) lists it as $259 for an existing fund, paid in advance for the next financial year, and $518 for a newly registered fund, covering both the current and next financial year. A fund with a corporate trustee also pays ASIC fees.

See our guide to the SMSF annual audit and return for the full timetable.

If the annual return is more than 2 weeks overdue, the fund may be unable to receive contributions or rollovers until it lodges.

How an SMSF is taxed

As at October 2026, the ATO's guidance is that a complying SMSF pays tax at a concessional rate of 15% on its assessable income, which includes concessional contributions, interest, dividends, rent and net capital gains. Capital gains on assets held for at least 12 months receive a one-third discount. Non-complying funds and non-arm's length income are taxed at the highest marginal rate of 45%.

Investment income from assets supporting a retirement phase pension can be exempt (exempt current pension income). Non-concessional contributions are generally not taxed in the fund.

Contribution caps for 2026–27

Contributions to an SMSF count towards each member's caps across all of their super funds. The caps rose on 1 July 2026 through indexation, as confirmed on the ATO's contributions caps page.

Members with a total super balance under $500,000 at the previous 30 June may be able to use unused concessional cap amounts from up to 5 earlier years. Members under 75 may be able to bring forward up to 3 years of non-concessional caps, depending on their total super balance, and the non-concessional cap is nil for anyone whose balance had reached the general transfer balance cap at the previous 30 June.

Our super contribution caps guide explains how the caps work and what happens if they are exceeded.

How it works

1. 1
   Is an SMSF right for you?

   We talk through the pros and cons, the time involved and the yearly costs (audit, levy, accounting and any ASIC fees). The ATO also recommends getting advice from a licensed financial adviser about whether an SMSF suits your circumstances.

2. 2
   Choose the structure

   Individual trustees or a corporate trustee, the members, and the trust deed that sets the fund's rules.

3. 3
   Establish and register

   Trustees consent and sign the Trustee declaration within 21 days, the fund receives its first assets, and it is registered with the ATO for an ABN and TFN within 60 days.

4. 4
   Set up the fund's operations

   Bank account, electronic service address, investment strategy and a system for keeping records and minutes.

5. 5
   Annual accounts and return

   Each year we prepare the fund's accounts and financial statements for the independent auditor, then the SMSF annual return.

What to bring

• The trust deed and any amendments
• Signed trustee consents and Trustee declarations
• Bank statements for the fund for the full financial year
• Contribution and rollover details for each member
• Investment records: share and managed fund statements, property settlement documents, rental statements and loan documents
• Market valuations of fund assets at 30 June
• Minutes of trustee decisions and the current investment strategy
• Details of any pensions or benefit payments made during the year