Winding up an SMSF can occur for a number of reasons from i’m over the burden and responsibility of SMSFs, failing health, disagreement/ separation of members and in the worst case your fund is non compliant and the ATO has directed you to wind up the fund.
Wind up considerations
There is a heap of considerations in winding up an SMSF and its important to consult with your SMSF advisor/ administrator in advance to assist you in planning the wind up. There is a wealth of knowledge on the ATO in regards to winding up a SMSF.
Key points to consider:
- Check the trust deed powers regarding the wind up of the fund. Most funds should have regular updates of the deed and recent updates should be included.
- All Trustees/ members must provide written instruction to wind up the fund, once agreed, members should provide the SMSF administration details of the fund where the benefits are to be paid (i.e. rolled over) or paid out as a lump sum.
- Appoint an SMSF Administrator to complete your final annual return including financial statements, tax return and audit. All tax obligations must be finalised and tax paid to the ATO.
- The final return should be lodged with the ATO ensuring the tax return confirms the fund is being wound up
- Inform the ATO the fund is wound up
- In the case that there is an expense to be paid post wind up or refund received the bank account should be kept open
- Deregister corporate trustee and if applicable Bare Trustee if property was held by the fund.
If you are considering winding up your fund, ensure you contact Redwood Advisory in advance.
