23 August 2023
If you’ve decided it’s time to wind up your self-managed super fund (SMSF), then you may be wondering where to start. It can be a complex process, with a lot of paperwork and possible tax implications, and the choice of what to do with your super next.
People opt-out of their SMSFs and wind them up for many reasons. It could be as the result of the death of a trustee , the management of the SMSF may be too time consuming, costing too much in administration fees, performing poorly, or the investment strategy is no longer appropriate.
Whatever your reason, given the complexities involved in winding up an SMSF you may want to consider getting professional advice and assistance, including financial advice, and tax advice about selling your SMSF assets.
Rolling your SMSF into a new super fund
Once all trustees of your SMSF have signed a written agreement to wind up your fund, there are various steps to take. It’s important to know once a SMSF is wound up, you can’t reactivate it. The trust deed (a legal document) of the SMSF may also list the requirements that need to be followed when winding up the fund.
Once you’ve sold all the assets of your SMSF, you need to decide what to do with your super. A financial adviser can review your personal situation and financial goals and offer advice on the options available to you. For example, an adviser may recommend rolling over your super to a super fund that takes care of running your account. Alternatively, if you’re retired or approaching retirement, they may suggest an account based pension as one option.
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There are a number of fee-for-service options offered by specialist accountants or financial advisers to help you wind up your SMSF. Fees may range depending on the complexity of the SMSF’s obligations and wind-up requirements.
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Winding up your SMSF
There are a number of tasks that need to be completed properly to wind up your SMSF. Some of these include:
- Reviewing your trust deed for it’s requirements on winding up the fund
- Getting written agreement by organising a meeting with all trustees to ensure everyone agrees with the decision. Keeping minutes and get every trustee to sign the agreement to wind up
- Selling or disposing of all the fund's assets
The Australian Taxation Office (ATO) provides full details on all the steps you need to follow, along with valuable resources to help you with this process.
Find out more from the ATO
Seek financial advice
Winding up an SMSF can be complex, given the amount of paperwork and tax implications involved. Before proceeding you should consider getting professional advice as the steps required for each SMSF and the potential impacts will vary, depending on:
- The trust deed and particular structure of the SMSF
- The assets of the SMSF
- Many other factors unique to your circumstances.
If you’re interested in closing your SMSF, or if you’d like to speak to someone about the process, we have a network of financial advisers* members can connect with.
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