SMSF set up

why do you think your personal assets are at risk with a SMSF,

what are you planing to do with it

and yes you do pay tax on your super contributions and profit (if it ever makes any) you obviously don't know it, but you have for years, as you fund has paid it.

I would suggest you start reading very carefully as your current conceptions of Super are a fair way off what you will need to know to run a fund.

and a SMSF can cost between approx $1,000 per year to four or five times that depending on how many transactions it has and how complicated those transactions are, and how good you keep your records.

they charge by the hour, so less work at their end = cheaper bill at yours

also factor in around $300 for audit costs, and $200 for filing fees with the gumnut.

good luck

Hi Troy

I have set up my own SMSF within the last 12 mths and used it to buy property.  Here are my comments:

Setup cost of SMSF was $1600.

I chose to have a corporate trustee.  You have to anyway if your SMSF has only one member.  Either way, corporate trustee is better for asset protection.  This is because if you personally get sued for something, then the SMSF assets are safe because they are owned by a different entity.  (Law suits are raised against an entity such as a person or a company).  YOU are one entity.  The corporate trustee (eg ABC pty ltd)  holding the SMSF assets is a separate entity.  Make sense?

My SMSF bought a 3BR house and borrowed 80% from St George Bank.  St George Bank required the asset is held under a bare trust, which cost just shy of $1000 to set up.

My annual costs to run my SMSF are $660 for tax return and audit purposes.  I've got my death and TPD (total & permanent disability insurance) in my SMSF as well at a cost of $60 per month.  Whether you realise it or not you have death and TPD insurance in your superannuation, which you will forfeit when you roll all your cash out of regular super.  You don't want to be exposed so make sure you are insured somewhere.

The bank will charge $5 per month for account fees on your SMSF's transaction account.

There will be all the usual annual costs for any property the SMSF buys (council rates, water rates, insurance, mortgage interest, maintenance costs re plumber etc, property management costs). 

Whether you realise it or not you ARE being taxed on your super money at the moment.  It just doesn't get taxed until it lands in your super.  If you look at the statements you will see 15% comes out for tax.

Your SMSF will pay 15% tax on any profits.  That means:

You work out your SMSF's income.  This will be your contributions as deducted from your salary plus any bank interest it earns plus any rental income it earns plus any dividend income on shares etc etc.

Then you work out your costs.  So  smsf accounting fees, death and tpd insurance, bank fees, property holding costs eg council rates, water rates, insurance, mortgage interest, maintenance costs re plumber etc, property management costs.

You then do an income minus costs calculation and the end figure is what is subject to 15% tax (if it is a profit figure. obviously no tax will be owing if there was a loss…. but you do not want to be running a SMSF at a loss).

Go for a property that is in a high demand area that is not going to have zero demand if the one and only industry in town goes bust or moves out.  You also want to aim for a rental yield of no less than 6.2% in my opinion.

Richard Taylor sorted out the SMSF mortgage for me.