We have a family business and would like to know if there are any restrictions for 3 or 4 of the family to set up a smsf together?

Hi Angela,

There are restrictions on who can be members of the one SMSF. There’s a restriction on employees being members of your SMSF unless they are related.

The definition of relative here includes an individual who is a parent, grandparent, sibling, uncle, aunt, nephew, niece, lineal descendant or adopted child of the individual or of his or her spouse. A spouse of the individual or any other individual referred to in the previous sentence is also a relative.

Also remember that you can only have a maximum of 4 members of the one SMSF.

Regards
James

Hello angela,

the short version of this is no.

the long version is it depends. There are lots of good reasons to set up a SMSF. Equally there are lots of really good reasons not to. They are complicated. They are expensive. you are taking on all the responsibility of managing things for your retirement. They take up time that you may not have to "self manage".

there are big restrictions on all sorts of things, and the first of them is getting the right advice to start with: whoever you get to assist you with getting this advice is probably going to be the same person to help you set it up and also the same person who helps with your accounting and audit obligations. Potentially adds up to a pretty significant sum, so you want to ensure that the person providing all these services is appropriately qualified and experienced to do so, and is not motivated by making a quick buck out of you but has your long term interest in mind.

Find a CPA or Chartered Accountant locally who has experience in the field. You should not try to do this via email, it will involve plenty of face to face time with your adviser. Talk to friends about who to use. And ask questions about their qualifications and experience before you commit to anything. hopefully someone on this forum will be your go-to person, or can recommend someone local to you.

good luck
Brendan

Hi Angela,

You, your husband & your two kids is fine and very common.

No real impact on the kids. They can choose to leave the SMSF later if they want and just ‘roll out’ their entitlements.

Regards
James

Hello Angela,
Whilst I am not able to directly assist you, I do have a fully licenced Financial Planner in my office who can.
Before that however, I want you to reflect on why you want to set up a SMSF?
Do you appreciate that you, and presumably your husband, take on the responsibility on managing the money in the fund?
Do you have the financial knowledge and time to undertake that responsibility?
Also, as previously explained, there are costs associated with setting up a SMSF and then there are the ongoing costs of running the fund.
Unless there is a reasonably substantial amount in the fund, it may not be a viable option. Some SMSF spruikers will say you only need a small sum in the fund, but the reality is you need a fund total that makes setting up an SMSF economical. In this office we usually suggest that clients need over $250k for the exercise to be worthwhile. More would be even better.
There is then the matter of managing any risk insurance that exists within the current super fund. Any health issues that the members now have may prevent them from continuing that insurance cover.
I've had my own SMSF since 1995, so I am aware of what is involved in managing a fund and can say it is not as simple as some people make out. Even more reason to use a reputable and reliable Financial Planner.