How to wind up your SMSF

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on October 13, 2021
How to wind up your SMSF

When you first set up an SMSF it is generally because it meets your needs at that time, but that can change, necessitating a ‘wind up’.

As your life situation changes, you may need to change or wind up your SMSF. You should regularly review your circumstances and decide whether to continue with your SMSF - or if you should wind it up. Maybe you’re going through a divorce, a trustee dies, or trustees fall out with one another, or you move overseas … or you simply don’t want to self-manage your super anymore. There are all manner of reasons to wind up an SMSF, and most come down to personal decisions.


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Lender

Variable
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SELF MANAGED SUPER FUND LOAN
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SMSF 80

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  • No monthly, annual or ongoing fees
Variable
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  • Easy refinance process
  • No application fee and no settlement fee
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Ocean SMSF (No Offset) (Metro) (Principal and Interest) (LVR < 60%)

  • Easy refinance process
  • No application fee and no settlement fee
  • No monthly, annual or ongoing fees
Variable
More details
  • Easy refinance process
  • No application fee and no settlement fee
  • No monthly, annual or ongoing fees

SMSF 70 (Refinance)

  • Easy refinance process
  • No application fee and no settlement fee
  • No monthly, annual or ongoing fees
Variable
More details
  • Easy refinance process
  • No application fee and no settlement fee
  • No monthly, annual or ongoing fees

Liberty SuperCredit SMSF (LVR < 60%)

  • Easy refinance process
  • No application fee and no settlement fee
  • No monthly, annual or ongoing fees
Variable
More details
  • Easy refinance process
  • No application fee and no settlement fee
  • No monthly, annual or ongoing fees

SMSF Residential

  • Easy refinance process
  • No application fee and no settlement fee
  • No monthly, annual or ongoing fees
Variable
More details
  • Easy refinance process
  • No application fee and no settlement fee
  • No monthly, annual or ongoing fees

SMSF 70 (Purchase) (New Customer)

  • Easy refinance process
  • No application fee and no settlement fee
  • No monthly, annual or ongoing fees

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 29, 2022. View disclaimer.


What to consider when winding up an SMSF

There are a few scenarios and lingering questions that could trigger a trustee wanting to wind up their SMSF:

  • Do I have a good knowledge of trustee responsibilities and obligations?

  • Do I have the time to run the SMSF?

  • Are SMSF running costs more than I want to pay, or would another super fund cost less?

  • Am I able to continue managing the fund’s investments effectively, or would I get higher returns if my super was managed in another type of fund?

  • Do I still want the responsibility of running the fund, including paying fines if things go wrong?

  • Do all trustees still agree on how to manage the fund?

How to wind up your SMSF

If an SMSF is no longer for you, these are the steps towards winding it up.

  • Check the trust deed for any wind-up instructions. All Trustees or directors should agree about the wind up and document their decision.

  • Pay out or rollover the balance of members’ super to another fund, which may involve selling assets.

  • A final audit must be completed before you lodge the last SMSF annual return. Appoint an SMSF auditor to complete the final audit

  • Complete and lodge the final SMSF annual return (including wind up details)

  • After all expected liabilities have been settled and requested refunds are received, close the fund’s bank account.

  • Pay any outstanding tax and other debts before you close your fund’s bank account.

Alternatives to winding-up

If you want to keep going with an SMSF, but can’t manage the duties and responsibilities, you could change to a different type of fund where a licensed trustee takes over the obligations. This would come at a cost, but the time savings may be worth it to you. Savings.com.au advises to speak to an SMSF professional about other types of super funds. They can also help you decide if an SMSF is still right for you.


Image by Joshua Hoehne via Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Aaron joined Savings.com.au in 2021. He is a finance journalist with a keen interest in property, the share market, and improving financial literacy in young Australians.

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