The fees for SMSF setup can be expensive, and it’s essential to know exactly what to expect. There are three primary costs that you’ll want to consider when establishing your fund: the trust deed, administration, and audit. The ATO has released new data on average SMSF setup fees to help you understand what to expect. The following information will provide you with an overview of the expenses you should expect to pay.
The first costs you need to consider when determining how much to spend on SMSF setup costs are operating and investment management fees. Investment management fees take up a more significant share of the SMSF’s cost. According to a 2017/18 ATO review, average SMSF operating costs ranged from $3,916 to $2,367 per year. Even if you use a corporate trustee, it could cost anywhere from $8,300 to $8,000 per year to run an SMSF.
Some providers offer unlimited SMSF services for a single low fee. Those fees are usually less than $1,000, but you’ll need to consider whether you’ll need ongoing upgrades and a lock-in period. Having an SMSF structure is necessary for borrowing and investing in investment property. Increasingly popular over the past few years are online SMSF administration providers. These services will provide initial setup, audit, and compliance management.
The costs of setting up an SMSF vary. While the fees for a company trustee are higher, an individual trustee’s setup costs are much lower. The Rice Warner report shows that the average SMSF setup fee ranged from $0 to $990 for a personal trustee, and the average cost is less than $500. A particular purpose company might be the better option for you if you plan on managing your SMSF for long-term investment purposes.
If you plan to maintain an SMSF for your retirement, you need to have a minimum balance of $500,000 to make it viable. A full-service SMSF will require a minimum of $250,000, while a self-managed SMSF requires a minimum balance of $200,000. However, there are many different fees associated with SMSF administration, and some of these are higher than others. These fees can vary between $1,500 and $2,459 for a small fund.
An SMSF needs a minimum of $200,000 to be viable. While you can save a few hundred dollars witha generalist accountant, you need to hire a specialist SMSF provider to handle your SMSF setup. An SMSF is a trust fund with the trustee company registering with ASIC, and the fees for a specialized trustee company are approximately $500. In addition, the costs for SMSF registration with ASIC are capped at $506 from 1 July to 2020.
An SMSF setup requires a trust deed and trustee declaration and is an integral part of the process. The ATO reported that the average cost for SMSF setup was $345, while the median price was $916. If you hire a corporate trustee, the fees will be even higher. However, you should know the fees before you sign any contracts. Aside from costs, it is also essential to consider other factors, such as how many advisers you can afford.