Are you planning to wind up your Self-Managed Super Fund? Do you wish to roll your hard-to-sell assets in an Industry fund? If your reply is yes, then, there are quite a few points you must keep in mind when the procedure actually begins. There are many enticing factors which all the SMSF members might encounter during the process. Well, let’s not make the whole process quite complex since you’ve already decided to wind up your Self-Managed Super Fund.
Crucial points to consider imperatively!
So, your decision to wind up your SMSF cannot be undone as the decision has been taken unanimously. To delve a bit deeper here is a checklist of the crucial factors which you should keep in mind when winding up your self-managed super fund.
- Assistance from the Australian Taxation Office!
At times, the intricacy of an SMSF reaches its pinnacle. As a result, winding it up by following the normal procedure becomes somewhat difficult. In such a situation, the trustees of the SMSF should consider seeking assistance from the Australian Taxation Office. Some of the key reasons for which trustees might stoop up to this kind of a position include the following:
- The wind up procedure is incurred by some unprecedented compliance issues.
- A notable investment of the fund has encountered an utter failure and
- Inadequate assets comprising the fund for paying audit or accounting fees etc.
Alternatively, you might also consider hiring one of the professional SMSF consultants and the person will guide you accordingly.
Steps involved in the SMSF wind up procedure!
Did you know that there are quite a few important steps included in the wind-up procedure of an SMSF? These include the following:
- Deciding upon the fact that how the benefits of the SMSF members should be dealt with. Say for instance, cashing out of the superannuation system or rolling over the funds elsewhere etc. Prominent examples include rolling over to permissible funds or to some additional funds etc.
- Verifying the governing rules and regulations of the SMSF. This is to ascertain that whether or not there are some special criteria to meet.
- Subsequently, you need to organize all the saleable assets of your self-managed super fund. You can sell these assets to the new fund in effect, its members or in the market as well.
- Make sure you roll over the benefits of your SMSF members properly
- Paying of all the remaining fund costs is imperative
- Now, you need to prepare the SMSF annual return and the final statements of your fund
- Auditing the fund in the pertinent year of its wind up is also essential
- You need to lodge the final annual return pertaining to your self-managed super fund.
- If there are some potential taxes dues, you need to clear them on time
Remember, there can be quite a few enticing aspects which might hinder the process of a smooth SMSF closure. So, be strategic in your actions and cease your self-managed super fund by closing its pertinent bank account.
- Up-to-date payment of pensions!
Trustee members who are drawing pensions must pay their pensions right on time. A pro-rata payment concerning last year’s minimum pension must be paid before the commutation begins. In case there is an adequate sum of balance, a pro-rata payment will not be required at all. This sum usually follows the commutation in relation to the minimum pension payment.
- Potential tax refunds!
Myriads of self-managed super funds are indebted for a tax refund in its final year of existence itself. It happens in contradiction where you can pay the SMSF duties only after lodging your SMSF tax return with the ATO. This particular situation is no exception and usually occurs when these SMSFs’ franking credits cross the conventional tax payable limit. Hence, this refund should be gauged carefully. Otherwise, chances are there that you won’t receive the refund before your SMSF winds up.
- Exempt income and pension commutations!
In a few circumstances, partial commutation is preferred more unlike an SMSF making retirement pension payments. It can also be in the form of paying out or rolling over a maximum portion of the account. This is to ascertain that the last payment made is entirely a pension payment.
The SMSF trustee will need to lodge a Transfer Balance Account Report with the Australian Taxation Office. This kind of situation arises when the SMSF was paying its potential pensions pertaining to its retirement phase. Subsequently, when these pensions are commuted, the need to lodge the TBAR emerges indispensably. Besides, an SMSF cannot be reactivated after it has been wound up after being established. You can hire one of the qualified SMSF accountants in Australia. Your SMSF account will guide you about the various complexities and nuances encompassing the windup procedure of an SMSF. As a result, you can wind up your self-managed super funds with flying colours.