Recently we have been involved in a wind up of a self managed superannuation fund. There are many reasons why winding up of a SMSF may be required including:
- The administrative cost of managing an SMSF is not just measured in cost but also in time. Many trustees find the ongoing responsibilities and paperwork a burden and are looking to simplify their affairs.
- If the trustees health starts to become an issue, the trustee fears this may impact on their ability to administer the fund.
- The SMSF fund assets have dwindled down and it is no longer cost effective to run the fund.
- Trustees move overseas and are no longer an Australian Resident for tax purposes.
- The members may have transferred their member entitlements / benefits to another fund.
- Marriage breakdown. Often in divorce situation neither party wants to retain the SMSF.
The following actions need to be carefully considered when winding up a Self Managed Superannuation Fund, including:
- Read the super fund trust deed, as it may contain vital information about winding up the fund.
- Make sure all ATO account liabilities have been paid.
- Make sure all ATO lodgements and activity statements are up-to-date.
- Complete and submit a Rollover Benefits Statement and send this statement to the receiving super fund provider.
- Complete this prior to the current Year End making the current financial year your last reporting obligation. Avoiding the fees associated with compliance obligations for a further year.
- Ensure all assets and member benefits have been transferred as by super laws and trust deed.
- Have an audit conducted for the income tax year.
- Keep a bank account open if a tax refund is expected
- Lodge the FINAL SMSF annual return.
- Complete questions confirming fund wound up during income year, confirming date wound up, confirming all lodgements and payments have been met.
- Notify the ATO in writing within 28 days of the fund being wound up.
If you are thinking about winding up your self managed superannuation fund. Please contact us on 1300 360 137, to book in a consultation, we will listen and assess your situation and then provide you with options.