More Australians are using SMSFs to take ownership of their retirement savings because they want more control over their money, more investment options, and to know exactly where their money is going. But before you start investing, you should know that an SMSF is about a lot more than that.
You need proper information and follow a simple, step-by-step plan to set up an SMSF.
Let’s walk through exactly how to do it the right way, and how an experienced SMSF accountant in Melbourne can help you avoid costly mistakes.
What Is an SMSF?
A Self-Managed Super Fund (SMSF) is a private super fund that you manage yourself. Unlike retail or industry super funds, the members of an SMSF are also its trustees.
If you do this, you are legally responsible for following ATO rules and paying your taxes.
In 2025, an SMSF can have up to six members, usually family members, business partners, or spouses.
Step-by-Step Guide to Setting Up an SMSF in 2025
Step 1: Decide If an SMSF Is Right for You
The ATO wants trustees to make sure they understand their duties before setting up an SMSF. You should think about:
- Do you have the time and financial knowledge to manage investments?
- Do you have enough balance?
- Are you willing to keep detailed financial and tax records?
- Can you make sure compliance by auditing and reporting regularly?
If you’re unsure, consulting an SMSF accountant in Melbourne is the best first step.
Step 2: Choose Your SMSF Structure
You can set up your SMSF under one of two structures:
1. Individual Trustees
Each member is a trustee.
- Lower setup cost
- Simple structure
All assets must be transferred into new names if someone joins or leaves the fund, which takes time.
2. Corporate Trustee (Recommended in 2025)
Each person is a director, and the company is the trustee.
- Less complicated management
- Better separation of assets
- More freedom to change memberships
- Better benefits for compliance
Most SMSF tax return accountants recommend corporate trustee structures for long-term stability and security.
Step 3: Create the SMSF Trust and Trust Deed
Once you choose your structure, you must establish:
The SMSF Trust
This creates the legal entity of your fund.
The Trust Deed
This document lays out the rules for your fund. They are:
- Member rights
- Investment rules
- Benefit payments
- Trustee powers
The trust deed must be drafted correctly in accordance with the Superannuation Industry (Supervision) Act 1993 (SIS Act).
Most trustees get this done professionally through accounting services in Melbourne or SMSF specialists.
Step 4: Appoint Trustees and Sign Trustee Declarations
Each trustee (or member of the corporate trustee) must:
- Be over 18
- Not be bankrupt
- Not have been disqualified by ASIC or ATO
The mandatory ATO Trustee Declaration (NAT 71089) must be signed within 21 days of appointment. This confirms they understand legal duties.
Step 5: Register the SMSF with the ATO and Apply for an ABN
You must register your SMSF with the ATO and apply for:
- Australian Business Number (ABN)
- Tax File Number (TFN)
During registration, you must declare the SMSF’s structure, trustees, address, and bank details.
Once approved, the ATO will list your SMSF on Super Fund Lookup, allowing employers to make contributions into your fund.
Step 6: Open an SMSF Bank Account
Your SMSF requires its own bank account, which should be completely separate from your personal or business accounts.
This account will be used for:
- Member contributions
- Rollovers from other super funds
- Investment purchases
- Paying expenses (audit, accounting, admin fees)
- Benefit payments in retirement
An SMSF accountant in Melbourne can assist with setting up accounts correctly to ensure compliance.
Step 7: Create an Investment Strategy
The ATO requires every SMSF to have a written investment strategy that considers:
- Diversification
- Liquidity
- Insurance for members
- Risks and expected returns
- Ability to pay benefits and liabilities
In 2025, the ATO has increased checks on “copy–paste strategies,” so your plan must be personalised and reviewed regularly.
Step 8: Roll Over Existing Super Funds
To start investing, you can roll over your money from industry or retail funds into your SMSF.
This must be done through the ATO’s SuperStream rollover system, which requires accurate fund details.
Step 9: Start Investing, But Follow the Rules
SMSFs have wide investment choices, including:
- Shares
- Managed funds
- Cash and term deposits
- Residential property
- Commercial property
- Cryptocurrency (with strict rules)
However, you must follow ATO investment rules, such as:
- No personal use assets
- No loans to related parties
- No buying assets from related parties unless allowed under the SIS Act
- No holiday homes or cars for personal use
An SMSF tax return accountant can guide you to avoid penalties.
Step 10: Meet Annual Compliance Obligations
Every SMSF must meet yearly requirements:
Lodge SMSF Annual Return
Includes tax return, regulatory reporting, and member statements.
Arrange an Independent SMSF Audit
A licensed SMSF auditor reviews your fund’s compliance every year.
Keep detailed records
Some records must be kept for 5–10 years.
Pay the ATO Supervisory Levy
Currently $259 per year.
Missing compliance deadlines can result in ATO penalties, trustee disqualification, or the fund being made non-compliant.
This is the main reason why most trustees hire a professional SMSF accountant in Melbourne to handle the whole process.
Managing an SMSF is rewarding but requires expert compliance, tax knowledge, and accurate record-keeping. If you want to set up your SMSF correctly in 2025, Leading Tax Experts can guide you through every step—from structure setup to investment strategy, annual returns, audits, and long-term tax planning.
Let us help you manage your fund with confidence and ensure full ATO compliance. Contact us today for personalised SMSF support.
Conclusion
In conclusion, setting up an SMSF gives you more control and freedom over your retirement savings, but it also comes with considerable responsibility. For long-term success, ensure your structure is correct, follow ATO rules, and stay up-to-date with compliance. With the help of an experienced SMSF accountant in Melbourne, you can easily manage your fund and come up with a tax-smart plan that will help you reach your retirement goals.
Frequently Asked Questions
How much money do I need to start an SMSF in Australia?
There’s no minimum legal balance, but the ATO suggests that SMSFs are cost-effective with a balance of $200,000 or more. Lower balances may result in higher comparative expenses.
Do I need an accountant to manage my SMSF?
According to the law, you can run an SMSF by yourself, but most trustees hire an SMSF tax return accountant to help them set up, file their taxes, go through audits, and make sure they are following the rules so they don’t get fined by the ATO.
Can my SMSF invest in property?
Yes, SMSFs can invest in both residential and commercial property, as long as the investment meets the “sole purpose” test, isn’t for personal use, and adheres to strict rules regarding borrowing and transactions with related parties.
