Winding up your Self Managed Super Fund is a big decision that cannot be reactivated. This decision has many possible implications such as the capitals gains tax (CGT) and stamp-duty liabilities.
You may be considering winding up your SMSF if you are living abroad for more than two years, have gone bankrupt or just want to have less wealth management responsibility.
We have outlined the tasks involved in this process and the 3 main options you could possibly take for winding up your SMSF. We aim to help you out with understanding the process and options available to when winding up your SMSF.
Tasks involved in winding up your SMSF include:
According to the ATO, the following tasks are required when winding up your SMSF:
- Completing requirements for winding up the fund as specified by your trust deed.
- Paying out or rolling over super. Members must meet a condition of release (COR) to access their benefits. If these are not met then you’ll need to roll over benefits to another super fund.
- You must appoint an approved SMSF auditor to complete the final audit before you are able to lodge your final SMSF annual return. Notably, you may not be required to lodge a return if your fund had no assets and was registered before 1 January 2015.
- You must pay any outstanding tax.
- You must ensure you have closed the fund’s bank account
The team at Fortis Accounting Partners is well-equipped for helping you wind up your SMSF.
What are your options when winding up your SMSF?
The 3 main options are:
1. Transfer the fund to a complying retail super fund
Retail super funds are developed by financial and insurance institutions whereas industry super funds are usually not-for-profit organisations. Notably, industry super funds usually offer a smaller array of investment choices and a less personalised service than the retail option. Examples of popular industry super funds include AustralianSuper, Rest Super, Sunsuper and Host Plus.
2. Transfer the fund to a Small APRA Fund (SAF)
You can convert your ATO-regulated SMSF to a small Australian Prudential Regulation Authority (APRA) fund, known as SAFs. SAFs require you to appoint a trustee and enable you to keep the same investments without the same responsibility. The cons include paying the trustee’s fees and limited flexibility. Notably, only approved Trustees, trustees from organisations approved by APRA, can be the trustees of your SAF.
3. Take money and invest outside super if you have met a condition of release (COR).
Common CORs include:
- Having reached preservation age and possibly having begun a transition-to-retirement income stream
- Having reached their preservation age OR 65 years (regardless of retiring)
- Retires on or after 60
- Death
At Fortis Accounting Partners, we would be happy to assist you in winding up your SMSF. For any queries of questions about your SMSF or wealth creation you can contact us on 9267 0108 and 9743 3600 to book a consultation, or visit our website at www.exemplary-financial.flywheelsites.com.
Our team of experts are only too happy to help.
