10 Tips for winding up an SMSF

 

There are many reasons why an SMSF may consider winding up, one example being due to the death of a member.  The process of winding up an SMSF can be complicated and trustees may not be aware of the steps involved. The following 10 tips will allow for a smoother audit process for the SMSFs:

 

  1. Ensure the decision and the date of the wind up is documented. All trustees/directors need to be aware of the situation and this is usually recorded by drafting minutes of the decision and having all trustees/directors sign the minute.
  2. Ensure no income or contributions are received after the date of winding up.
  3. If benefits are being paid to the member, dispose of all assets including any fixed interest investments and ensure the bank account remains open.
  4. In the case of an in specie transfer ensure that investments are transferred at market value.  It is also important to ensure that valuations are obtained for any related party investments.
  5. Pay any known SMSF expenses and provide for anticipated expenses, including any income tax payable, prior to winding up.
  6. Calculate any income tax receivable and document as a receivable in the financial statements. Ensure the closing net asset position of the fund is nil as at the date of wind up.
  7. Document any benefit payments, including evidence of how a ‘condition of release’ was met.
  8. Obtain a copy of the members’ benefit statement and instructions for all benefits rolled over. For audit purposes obtain confirmation the rollover was received by the receiving superannuation fund(s).
  9. Obtain a copy of the bank statements for the year of audit and up until the date the bank account was closed.
  10. Ensure the notes to the financials document the fund as not going concern for the year of wind up.