How much will your SMSF cost you? What fees will you incur?

How Much Will Your SMSF Cost You?

It depends on how much you do yourself and how much you get others to do. Over the lifecycle of your SMSF there are at least 16 different trigger points that might cost you money. Here is a quick overview.

SET UP

1 – ASIC fees to Set Up Corporate Trustee

Your SMSF must have a trustee. This can be the individual members or a company. Going with individual members is far from ideal but free.

The ASIC registration fee for a corporate trustee is $495 at the moment but increases each year. 

2 – Trust Deed

Your SMSF is not a separate legal entity as such but only a relationship between trustees and members over trust property. This relationship is defined in the SMSF deed. And this document usually doesn’t come for free.

3 – Exit Fees for Transfer of Super Assets

You transfer your current super balance from your previous superannuation fund into your SMSF’s newly set up bank account.

Scenario A and B: Your previous fund will charge you exit fees.

4 – Help with Set Up

Scenario A: You do it all by yourself.

Scenario B: Your accountant does it and might charge you a fee. 

ADMINISTRATION

So now you are ready to go. Your SMSF is set up and you got cash in the bank.

5 – Bank Account

Scenario A: Your bank account (eg. NAB, CBA, ING, Macquarie, Bank West) is free.

Scenario B: You pay about $10 per month for a bank account that isn’t free.

6 – Investment Costs

Scenario A: You move your bank balance to a term deposit. That is pretty much the only thing you can do without incurring any fees.

Scenario B:  You buy and sell shares, bonds, managed funds, ETFs, residential or commercial property or something else. Whatever you do, there will be additional charges – somehow, somewhere. 

7 – Financial Adviser

Scenario A: You do your own research.

Scenario B: You engage an adviser and usually pay a fixed fee plus a certain percentage of funds under management.

8 – Accounting

Scenario A: You run the books, get the actuary certificate when needed, prepare the annual return, get it through the audit and lodge it.

Scenario B: You engage an accountant. Their fee depends on the size and complexity of your SMSF. The average annual fee is about $2,500 but some accountants charge a lot more. We charge less.

9 – Software

Scenario A: You use an Excel spreadsheet or desktop software you already got or the free basic version of McLowd.

Scenario B: Your accountant will probably use Class Super or BGL 360 to administer your SMSF.  The cost of this software is usually included in the accountant’s fee.

10 – Audit

Every SMSF needs an audit before it can lodge its annual return. The auditor needs to be registered with ASIC and be independent. The audit fee is separate to any accountant’s fee.

Scenario A: Online providers offer options around the $300 mark.

Scenario B: Brick-and-mortar SMSF auditors charge around $500 per audit.

11 – Actuarial Certificate

Whenever your SMSF is in hybrid mode – ie in accumulation and retirement mode – you need an actuarial certificate.

Scenario A: The cost is around $100 when you order it directly online.

Scenario B: Your accountant will probably procure this certificate via the accounting software they use and the cost there is around $130.

12 – Annual ASIC Fees

Scenario A: There are no ASIC fees since your SMSF has individual trustees.

Scenario B: The annual ASIC fee for your corporate trustee is around $60.

13 – SMSF Levy

The ATO will charge an SMSF levy of around $300 to your tax refund or liability when you lodge your tax return. 

14 – ATO Penalties

Superannuation is a highly regulated environment where it is easy to make mistakes. And those mistakes often come with heavy penalties and interest.

Scenario A: Make sure you do your research.

Scenario B: If you engage an accountant and follow their advice, you are less likely to incur penalties or interest.

CLOSING DOWN

One day everything comes to an end. There are either no funds left or the last member died or you decide to go back to an industry or retail fund.

15 – Administrator

Somebody needs to cancel your SMSF’s ABN and GST registration (if applicable), notify the ATO and prepare a final annual return.

Scenario A: You might no longer be around to handle this, so you need somebody else to do it. And that person might charge a fee.

Scenario B: Your accountant usually takes care of this but might charge a fee.

16 – Deregistering Corporate Trustee

Scenario A: There are no fees since you don’t have a corporate trustee.

Scenario B: Cancelling your company incurs an ASIC Fee, curently $40.

Summary

So how much your SMSF will cost you depends on what you do and how you do it. We hope this quick overview helps you. Please call or email if you get stuck.

 

MORE

SMSFs Need an ABN

Superannuation Investment Rules

SMSF To Do List

 

Disclaimer: numba does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.

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Last Updated on 13 January 2020