Winding up of a SMSF
The winding up of a SMSF is a process whereby the Fund has no assets left, and all the final reporting and administrative requirements have been completed by the trustees, such that the SMSF becomes closed.
If you are winding up your SMSF, you need to carefully complete all the required tasks.
There are a few reasons why trustees may wish to wind up their SMSF:
The death of a member.
Often this can be the main reason that the remaining member(s) to decide that they do not wish to continue on with a SMSF, particularly if the deceased member was the one who was the driving force behind the original establishment and ongoing management of the fund.
There are no assets left.
If over time, all the monies in your SMSF have been paid out either as a lump sum or as pension payments to members, then you need to wind up the fund.
Its just not for you anymore.
Trustees establish SMSFs for a variety of reasons, however for some people the ongoing paperwork and daily investment management becomes a hassle that they just don’t want to have to deal with anymore. Similarly, trustees who have had poor results from their investment management sometimes decide its best to hand it back to a fund manager and rollover their superannuation into a retail or industry super fund. There is nothing wrong with this, and is a perfectly legitimate course of action.
You are moving overseas.
If your moving overseas, then depending on your length of absence, your SMSF may be in danger of failing the definition of being an Australian regulated superannuation fund. An alternative to winding up the Fund (if your returning to Australia) may be to appoint an ‘approved trustee’, which is basically a professional corporate trustee company. In this case your SMSF becomes what is known as a ‘small APRA fund’ and is regulated by APRA. On your return, you can then revert it back to a SMSF and take on the trusteeship again.
To wind up your fund:
- Complete any requirements that the trust deed specifies about winding up the fund;
- Pay out or rollover all super (leaving a sufficient amount to pay final tax or expenses if required)
- Appoint an SMSF auditor to complete the final audit
- Complete and lodge the final SMSF annual return (including wind up details)
- Pay any outstanding tax
- After all expected liabilities have been settled and requested refunds are received, close the fund’s bank account.
Once a fund is wound up, it can’t be reactivated.
Call Sunshine Coast SMSF Solutions for assistance on (07) 5451 6888 or send us an email.
Sunshine Coast SMSF Solutions
61- 63 Primary School Court
PO Box 6070, Maroochydore,
BC QLD 4558
Phone: +61(0) 7 5451 6888
Fax: +61(0) 7 5451 6809