Setting up a Self‑Managed Superannuation Fund (SMSF) involves a range of administrative and compliance steps and naturally, some upfront costs. A common question many trustees ask is:
Can You Reimburse Yourself for SMSF Setup Costs?
Yes, but only in some circumstances.
The Australian Taxation Office (ATO) allows a SMSF to reimburse trustees for certain expenses incurred on behalf of the fund, but only if the expense is properly allowable and relates directly to establishing or operating the SMSF.
However, not all setup costs are treated the same. Some cannot be reimbursed, and some are not tax deductible.
To stay compliant, trustees must ensure:
- The SMSF trust deed allows reimbursement
- The expense was genuinely incurred for the SMSF
- The payment is correctly documented
- The SMSF has been established at the time the cost is reimbursed
Which SMSF Setup Costs Can Be Reimbursed?
The following costs are generally allowed to be reimbursed by the SMSF:
-Trust Deed Creation
Legal fees for drafting and establishing the trust deed.
-SMSF Registration Costs
Including setup packages from administrators or accountants.
-ATO Registration and Compliance Costs
Fees relating to obtaining an ABN, TFN, and electing to become a regulated fund. These are considered valid fund expenses, so the SMSF may reimburse the trustee once the fund is operational and has its own bank account.
Which Setup Costs Cannot Be Reimbursed?
There are certain expenses that generally cannot be reimbursed directly by the fund, including:
-Financial Advice Costs for Personal Benefit
If advice relates to whether you should set up an SMSF (i.e., personal circumstances), it is not an allowable fund expense.
-Establishment Costs Not Incurred on Behalf of the Fund
For example, if the expense is paid before the SMSF legally exists, it may not be reimbursable.
-Costs Connected to Your Employer or Business
Corporate structuring or business-related expenses fall outside SMSF rules.
When in doubt, seek guidance, incorrectly reimbursing yourself may breach trustee obligations.
Are the Setup Costs of an SMSF Tax Deductible?
This is another important question.
Not All SMSF Setup Costs Are Tax Deductible – Establishment costs (such as creating the trust deed) are considered capital expenses and are generally not tax deductible.
Ongoing Operating Costs May Be Deductible – While setup expenses are usually not deductible, many ongoing costs ARE tax deductible to the SMSF, such as:
- Annual accounting fees
- ATO supervisory levy
- Investment‑related expenses
- Actuarial certificates (if required)
The key difference: setup = capital expense (not deductible) vs ongoing = operational expense (deductible).
How to Properly Reimburse Setup Costs
If the SMSF is allowed to reimburse you, follow these steps:
- Ensure the fund is established (trust deed executed and bank account opened)
- Keep original invoices in the SMSF’s name
- Make the payment as soon as possible, as any delay may lead the ATO to view it as a prohibited SMSF loan.
- Ensure payments come from the SMSF’s bank account
- Confirm the expense relates to SMSF establishment or operation
Proper documentation is essential for audit and ATO compliance.
Final Thoughts
You can reimburse yourself for certain SMSF setup costs, but only those that qualify as genuine fund establishment expenses. While many setup costs are not tax deductible, reimbursement is often still permitted if the expenses were incurred on behalf of the fund.
As SMSF rules can be complex, always seek professional advice if you’re unsure whether a specific cost is reimbursable or deductible.
If you’re unsure where to start, your SMSF accountant can guide you through the process and help ensure your fund is registered smoothly with the ATO and ASIC.
