Wind-Up of a Daily SMSF

There are several steps required to correctly terminate a self managed super fund, referred to as winding up a fund and these generally include:

  1. The liquidation of assets
  2. The payment of fund expenses and liabilities
  3. The rollover or payment of member benefits
  4. The closure of the fund bank account before the end of the financial year on 30 June
  5. The preparation of the financial statements and tax return
  6. The audit of the financial statements and tax return
  7. The lodgment of the final tax return and receipt of assessment
  8. Cancellation of the fund ABN & Notification to the ATO of the Fund’s windup

When will my benefits be rolled to my new fund?

Member rollovers or benefit payments can usually occur early in the process for the majority of a member’s benefits. It is important not to transfer more than the members entitlement or the Trustee may find themselves trying to cover any remaining fund expenses or taxes out of there own pocket. So a smaller second rollover or payment will usually be recommended after the final member benefit calculations are completed. Members should also consider their insurance benefits within the fund and any necessary replacement of policies before their cancellation on fund closure. Members should seek professional advice with regard to their individual needs and circumstances in this regard.

How long will it take?

There are circumstances in which a fund may not be able to be wound up, for example if there is no market to sell the assets or the assets have been frozen. Sometimes it may be possible for the individuals to buy the assets from the fund, if the market value can be correctly determined and the individuals are willing to purchase the asset. The most ideal time to plan to wind up the fund is at the start of the year before any income has been received or income tax instalments paid to the ATO. If the fund is in a refund position with the ATO the bank account is required to remain open to deposit the cheque, which in turn means the fund can’t be closed before 30 June and may result in the fund remaining active for an additional year. We will assist you in determining this if you decide to wind up the fund later in the year after income has been earned and tax instalments have been paid.

Can I take the money out of Super?

It is important to determine if members are required to retain their benefits in super. This will be the case if members are under 55 and haven’t satisfied a condition of release. These members need to rollover their benefits to another super fund. If members are rolling over to an industry or retail superfund, all assets will need to be sold to allow a cash payment to be made to the chosen rollover fund. Members who are 55 or over and have satisfied a condition of release can still choose to rollover their benefits to another superfund. Alternatively they may choose to take the benefits as a lump sum payment. If members are taking a lump sum payment they may also request to be paid in assets rather than cash. This is referred to as being paid in-specie and requires a written market valuation for the asset to ensure they are transferred at the correct price.

I want to wind up the fund, what do I need to do?

I want to wind up the fund, what do I need to do? When you have made the decision to wind up your SMSF contact our office and we will provide you with a windup instruction and documentation pack. You will then need to ensure you complete all of the following and return all documentation to our office no later than 7 May to ensure sufficient time to complete the process before 30 June:

  • Sell all assets and deposit the proceeds to the main bank account
  • Review your insurance needs before cancelling any insurance policies held by the fund
  • Deposit any insurance premium refunds to the main bank account.
  • Close any other bank accounts, transferring closing balances to the main bank account.
  • If dividend reinvesting ensure residual accounts are closed and paid to the main bank account.
  • Complete and sign any off market transfer forms for assets to be transferred in specie.
  • Complete and sign the member instructions for rollover.
  • Complete and sign the windup paperwork instructing Supercorp to proceed with the wind up of the fund
  • If the fund is a daily fund, this will include an instruction to change the fund to our annual service.

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