What is a self-managed super fund

SMSF: What is it?

What is a self-managed super fund

A self-managed super fund (SMSF) is a type of superannuation fund in Australia that is managed by its members, who also act as trustees. Moreover, SMSFs are established for the purpose of providing retirement benefits to the members. 

In retail or industry super funds, the investment decisions are made by professional fund managers. For SMSFs, however, SMSF members have direct control over the investment decisions of the fund.

Key features of SMSFs

Member Control: Members of an SMSF act as trustees and are responsible for managing the fund’s investments and complying with all legal and regulatory requirements.

Investment Flexibility: SMSFs also offer a wide range of investment options, including shares, property, managed funds, term deposits, and more. This flexibility allows members to tailor their investment strategy to suit their individual preferences and financial goals.

Limited Membership: SMSFs are typically limited to a maximum of six (6) members. Thus, making them suitable for small groups of family members or business partners looking to pool their superannuation assets for investment purposes.

Regulation: SMSFs are regulated by the Australian Taxation Office (ATO) and must comply with strict rules and regulations governing their operation. Failure to comply with these rules can result in penalties or the loss of concessional tax treatment.

Taxation Benefits: SMSFs also enjoy concessional tax treatment, including a lower tax rate on investment earnings and potential tax deductions for contributions made to the fund.

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Cost to establish and maintain an SMSF

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 $1,500 for a single Trustee structure. However, it can go up to $2,750 for a Corporate Trustee structure.  This where a company is established to act as trustee for the SMSF and all members are directors.

SMSFs must also be audited each financial year and financial statements must be prepared by an accounting service. Moreover, a tax return must be prepared and submitted each year. The cost of audit and accounting is around $2,000 per annum.

Main benefits and drawbacks of a SMSF

  • More choices and freedom to access investment options that may not be unavailable through a more traditional industry super fund.
  • Offers greater scale to access investment opportunities and provides a greater range of alternatives.
  • Provides greater control over how your super is invested.
  • Offer tax benefits in that, your investment is taxed at a maximum of 15% as opposed to your maximum personal tax rate which could be as high as 45%.
  • Running an SMSF successfully is complex, requiring investment, legal, super and admin skills— or the ability to get help from people who have those skills.
  • Annual accounting and tax running costs.
  • Your and the other’s members time involvement in managing the fund.


Indeed, SMSFs can offer greater control and flexibility over retirement savings compared to other types of superannuation funds. However, they come with additional responsibilities and administrative requirements. Hence, they may not be suitable for everyone.

Moreover, individuals considering establishing an SMSF should seek professional advice first. This is to help them ensure it is the right option for their financial situation and goals.

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Need help with your legal matter?

AussieLegal offers affordable legal kits and paralegal services to help you address a range of legal matters in a cost-efficient manner. From family law matters to property and conveyancing transactions, our experienced and qualified team is ready to assist you. This includes assistance with the preparation of Binding Separation Agreements (BSA), which is essential for splitting SMSF.

AussieLegal itself is not a law firm and we are not permitted to provide legal advice. However, we are working under a collaborative arrangement with a panel of independent law firms across Australia. Thus, allowing us to help our clients with more complex legal tasks that require formal legal advice. Moreover, we can ensure that our clients meet the regulations set by the Courts in compliance with State and Federal legislation.

Need more options? Call us on 1300 728 200 to discuss your situation with one of our consultants.

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