Setting up a self-managed super fund

Holding fund assets

To be legally established, your fund needs to hold assets. The trustees hold the fund's assets in trust for the benefit of the members.

Your fund is usually established when the members make a contribution to the fund at the same time the trust deed is executed. A contribution can take the form of money or a transfer of certain assets - for example, listed shares and securities.

New rules for SMSF investments in collectables and personal-use assets were introduced on 1 July 2011. You need to be aware of how these types of assets are being held and stored by your fund. You must document decisions about storage - for example, in your SMSF meeting minutes.

For more information about: contributions see Accepting contributions and rollovers refer to Running a self-managed super fund (NAT 11032) collectables and personal use assets, refer to Collectables and personal use assets - questions and answers.

Ownership of your fund's assets

One of your responsibilities as trustee is to make sure the assets of the fund are protected and are held separately from your own assets.

Assets should be recorded in a way that:

• distinguishes them from the trustees personal or business assets
• clearly shows legal ownership by the fund.

This can protect fund assets in the event of a creditor dispute and prevent costly legal action to prove who owns them.

Depending on the types of trustees chosen, fund assets (other than money) should be held in the name of either:

• individual trustees as trustees for the fund
• the corporate trustee as trustee for the fund.

Fund assets cannot be held in the name of a trustee or member as an individual.

Examples

The Jones Family Super Fund has two individual trustees, Bill and Penny Jones. If legally possible, the fund's assets should be held in the name of Bill and Penny Jones as trustees for the Jones Family Super Fund.

The Anderson Super Fund has a corporate trustee, ABC Pty Ltd. If possible, the fund's assets need to be held in the name of ABC Pty Ltd as trustee for the Anderson Super Fund.

If state laws do not allow the use of the name of the fund, you need to clearly show and document your fund's ownership of the asset - for example, by using one of the following:

• a caveat
• legal instrument
• declaration of trust.

For more information about documenting your fund's ownership of the asset, contact the relevant state or territory titles office.

Sections within Getting your fund started

• SMSFs are trusts
• Obtaining a trust deed
• Appointing trustees
• Holding fund assets
• Signing a trustee declaration
• Recording each member's tax file number
• Registering with us
• Opening a bank account
• Check your progress