How much does SMSF Australia charge for annual SMSF accounting?

SMSF Australia offers three fixed-fee annual packages: Basic Fund at $1,300+GST (listed shares, managed funds, ETFs, term deposits), Complex Fund at $1,600+GST (adds direct property up to 2, cryptocurrency, precious metals), and Very Complex Fund from $2,000+GST (unlisted assets, private loans, derivatives, NFTs, 3+ properties). All packages include the independent SMSF audit at no additional cost.

Is the SMSF audit included in the annual fee?

Yes. The independent SMSF audit is included in all three annual fee packages — Basic, Complex, and Very Complex. It is not charged as a separate add-on.

Can SMSF Australia service my fund if I am not in the same state?

Yes. SMSF Australia operates nationally across all Australian states and territories. All client meetings and services are conducted via Zoom — there is no requirement to be near a physical office.

How much does it cost to set up an SMSF with SMSF Australia?

The SMSF setup fee is $2,000+GST, which covers corporate trustee establishment (ASIC fee $636), SMSF trust deed ($400), Class Super first-year licence ($250), ABN and TFN applications, investment strategy preparation, and rollover coordination.

Does SMSF Australia provide financial advice?

No. SMSF Australia does not provide financial planning or investment advice. Services are limited to SMSF accounting, tax, audit, compliance, and legal matters.

SMSFs Investing in a Related Unit Trust

A trustee can invest in a related unit trust provided they meet the superannuation laws and regulations (SIS). A related unit trust is often a structure which is used to purchase business premises by pooling resources between related parties.

However, a particular red flag to the Australian Taxation Office (ATO) is trustees of SMSFs investing in a related party unit trust. It is crucial that a SMSF trustee is aware of the compliance rules.

The compliance rules include:

sole purpose test – the trustee must maintain the fund for the member’s retirement or their dependants if they die before retirement
arm’s length rules – all transactions within the unit trust must be at arm’s length as well as acquiring or selling the units
keeping assets separate – the legal title must be in the name of the fund’s trustee or custodian if it is part of a limited recourse borrowing arrangement (LRBA)
in-house-asset rules must be adhered to
must not acquire units from a related party unless the transaction comes under one of the allowable exemptions
the fund’s investment strategy must include this type of investment and the fund’s trust deed must also allow it

It is also important to ensure compliance with the Taxation Legislation in relation to non-arms length income (NALI). Basically, the NALI provisions tax income at 45% when income received by a SMSF is greater than what is expected, or an expense is less than or nil when two parties are not dealing at arm’s length. (Refer to our resources page on NALI for further details).

Please seek advice from your SMSF Specialist or financial advice from your Licensed Financial Adviser regarding related unit trusts to ensure compliance with superannuation laws and regulations.

What is a Related Unit Trust?

It is an investment in a unit trust where the trust is controlled collectively by related parties.

Under SIS s10 related parties include:

a member of the fund
a standard employer sponsor of the fund
a Part 8 associate of an entity referred to in the above

A member of the fund is straight forward. A standard employer sponsor is relatively rare these days and is more than an employer who merely makes contributions to a SMSF, It is worth checking if your SMSF’s trust deed include a standard employer sponsor as being a party to the deed. Generally, if a fund has a standard employer sponsor they are identified on the front page of the trust deed and will be a signatory to the deed.

A Part 8 associate can be very complicated. Broadly it is an individual who has a close relationship with an SMSF member and can collectively, with all Part 8 associates of the member, influence the decisions and actions of the unit trust or trustee of the unit trust. A Part 8 associate includes a SMSF member or relatives, a partner in a partnership, a standard employer sponsor and a company or trust.

A related trust is defined under SIS s10 and includes a trust that a member (or a standard employer-sponsor) of the fund controls. Control includes:

collectively the part 8 associates of a SMSF member (or the member acting alone) holds more than 50% of the units or has a fixed entitlement to more than 50% of the capital or income of the trust
collectively, or alone, the individual trustees or the directors of a corporate trustee are Part 8 associates and can control the trust or control who can appoint or remove the trustee
the directions, instructions or wishes of the trustee of the trust or a majority of the trustees can influence the trust

In-House Asset Rules

SMSFs Investing in a Related Unit Trust The in-house asset (INHA) rules provide a SMSF cannot hold units in a related fixed unit trust unless the holding falls within a 5% threshold, or the related unit trust is eligible to be an ungeared (non-geared) unit trust.

An SMSF can acquire INHAs up to 5% of the total value of a SMSFs assets measured at the time the units in the trust are acquired and thereafter as at 30 June.

Example – Kent Family SF (KFS) purchased 12,000 units in the Kent Road Unit Trust (KRUT), a related unit trust. KRUT has borrowings and therefore not an ungeared unit trust. The units were acquired on 1 March 2024 for $22,000. The net value of KFS on 1 March 2024 was $350,000 which included total assets of $500,000 and borrowings of $130,000 and other liabilities of $20,000.

KFS can acquire units in KRUT as at the time of purchase the value of the units was 4.4% of the fund’s total assets which is under the 5% threshold allowed. However, it is critical to ensure the value remains under 5% as at 30 June each year.

Ungeared Unit Trusts

SMSFs Investing in a Related Unit Trust A SMSF can purchase up to 100% of the units in a unit trust which is a related party provided the unit trust meets the eligibility requirements as outlined in the Superannuation Industry (Supervision) Regulations 13.22B to 13.22D, colloquially known as an ungeared or non-geared unit trust. The government wanted to enable family business owners to utilise their SMSFs for holding their business premises allowing related parties to pool their resources to do this.

The requirements include:

the trust cannot borrow
property is not leased to a related party unless it is business real property (commercial or business property)
property has not been acquired from a related party unless it is business real property
the unit trust does not carry on a business (including property development)
all transactions must be made at arm’s length
the underlying assets owned by the unit trust cannot be charged or used as security
the unit trust cannot invest into another entity i.e. cannot hold shares in BHP or another company or unit trust

Examples of Related Unit Trusts

Ungeared Unit Trust

Fred and Harry are brothers and Ted is a friend but is not related or in partnership with Fred and Harry. Each of them has a self-managed superannuation fund. They want to buy a residential investment unit. A unit trust, John Street Unit Trust (JSUT) is established with a corporate trustee, John Street Pty Ltd and each of the individuals is appointed as a director. Each of the SMSFs acquire 300,000 $1 units in JSUT. The property is not being rented to any of the parties involved. JSUT is a related party of Fred’s SMSF and Harry’s SMSF but not a related party of Ted’s SMSF. The trust has no borrowings and complies with the rules in relation to ungeared unit trusts. They have collectively pooled their resources to acquire a property in a developing area which has good tenant occupancy and potentially good capital gains. Each SMSF complies with SIS and can continue to hold units in JSUT.

In-House Asset

The Smith SF invest into the Smith and Jones Unit Trust (SJUT). John Smith, a member of the Smith SF and Fred Jones who is not related to the Smith SF also invest in the unit trust. Each unit holder invests $20,000 and acquires 20,000 $1 units each. SJUT invest into speculative mining shares. John Smith and the Smith SFD collectively control SJUT as they own 2/3 of the total number of units. SJUT is a related party of the Smith SF. SJUT is not an ungeared unit trust as the investment into mining shares makes it ineligible. Provided the value of the units owned by the Smith SF are less than 5% of the total assets of the Smith SF it can acquire units in SJUT.

Limited Recourse Borrowing Arrangement (LRBA) Using a Unit Trust Structure

Practicality a SMSF is unlikely to use a Bare Trust or LRBA to invest in a unit trust which is a related unit trust.

The single acquirable asset subject to the LRBA is the units and not the underlying asset or property. This effectively means the units in the unit trust would have to be used as security to obtain a loan. It is doubtful a lending institution would lend money to a SMSF under these circumstances. A related party loan may be technically possible but the difficulty a SMSF trustee faces is ensuring the loan terms and conditions do not fall foul of the non-arm’s length income (NALI) provisions under the Australian taxation laws. The ATO’s safe harbour guidelines do not apply to private unit trusts. Thus, the SMSF trustee has to obtain evidence of what those commercial terms and conditions would be. Given that most banks or other lending institutions are unlikely to lend money the evidence would be difficult to obtain.

Self-Managed Super Funds Holding units in Related Unit Trusts

Can a property owned by the unit trust (related) be used to develop a property?

It would be very unlikely. A related unit trust is generally an ungeared unit trust and cannot carry on a business. A development of a property may be classified as carrying on a business which would not meet the eligibility requirements under regulation 13.22C. Practically, it would be very complex as the unit trust would be unable to borrow or use the property as security. All transactions must be made at arm’s length. If any of the conditions do not meet the eligibility requirements the investment is tainted forever. There is no fix and the unit trust is classified as an INHA and the most likely resolution is the sale of the units.

Is my employer who contributes to my SMSF a standard employer sponsor and potentially a related party of my SMSF?

It is unlikely. A standard employer sponsor is more than just an employer who contributes to your fund. A standard employer sponsor is under a formal arrangement between the employer and the trustee of the fund which is usually identified in the fund’s trust deed and the standard employer sponsor is a signatory to the trust deed and generally, can appoint or remove the trustee.

My SMSF has an INHA being units in a related unit trust – What happens if the market value of my SMSF assets decrease due to the downturn in the property market resulting in the value of the units exceeding 5% at 30 June 2024?

The SMSF must enter into a formal plan and implement the steps before the 30 June 2025 to reduce the INHA below the 5% level. The related unit trust may redeem a sufficient number of the SMSF’s units to resolve the breach.