SMSF explainer
What is an SMSF? A plain-English guide to Self-Managed Super Funds
A Self-Managed Super Fund (SMSF) is a private super fund — a trust regulated by the ATO — that you run yourself, for yourself and up to five other members. You choose the investments, you set the strategy, and you pay a fixed admin fee instead of a percentage of your balance. This page covers what an SMSF actually is, how to set one up, what it costs, and the tax treatment of those costs.
How an SMSF works
An SMSF is a superannuation fund with up to six members, where every member is also a trustee (or a director of a corporate trustee). The fund holds its own bank account, owns its own investments, files its own tax return, and is independently audited each year. The Australian Taxation Office — not APRA — is the regulator, and the rules sit in the Superannuation Industry (Supervision) Act 1993 (SIS Act) and SIS Regulations.
The trade-off versus an industry or retail super fund is control vs convenience. In an APRA fund a professional trustee invests on your behalf inside a fixed product menu, and you pay a percentage of your balance forever. In an SMSF you choose the investments — direct shares, ETFs, term deposits, managed funds, and (for funds that qualify) direct property via a Limited Recourse Borrowing Arrangement — and you pay a fixed annual admin fee instead.
How to set up an SMSF: choose members and trustee structure, establish the trust deed, register the fund with the ATO (TFN, ABN, regulated-fund election), register the corporate trustee with ASIC if you're using one, open the fund's bank account and Electronic Service Address for SuperStream, document an Investment Strategy that satisfies regulation 4.09 of the SIS Regulations, and roll over your existing super. easySMSF handles every step for a single fixed fee — see the SMSF setup guide for the detailed walkthrough.
Are SMSF setup costs tax deductible? No — establishment costs (trust deed, ASIC registration, ATO registrations) are capital costs of the fund and are not deductible. Once the fund is running, however, ongoing administration, audit, actuarial certificate, tax agent and ASIC annual review fees are deductible to the fund each year against its assessable income.
- Private super fund — up to 6 members, all trustees
- Regulated by the ATO under the SIS Act
- You choose the investments and the strategy
- Independent annual audit required
- Fixed admin fee replaces percentage-of-balance fees
- Setup costs are capital (not deductible); ongoing admin and audit fees are deductible
- Most cost-competitive from around $200,000 in combined balances (ASIC guidance)