How to Get out of a Self Managed Super Fund

  • Posted 22 Oct

How to Get out of a Self Managed Super Fund

A self-managed super fund is a great option for some people. If you have investment experience and the necessary skills to make more money with your retirement funds, then it makes sense for you to take the helm and steer the course of your own retirement earnings.

With that said, a SMSF is a financial move that requires meticulous planning and a thought-out exit strategy.

Why Would You Want to Get Out of a SMSF?

There are plenty of reasons to call it quits on a self-managed super fund. You might find that the benefits of being in charge simply don’t outweigh the time management and requirements of you while in a SMSF.

If you get into the account together with a group of people, you might have a falling out or disagreement.

Whatever the reason, it’s important to know how to close out you SMSF properly so as to avoid any legal hassles developing.

Steps for Closing and Getting Out of a SMSF

Once you’ve made the decision to get out of a SMSF, it’s important to follow the laws and regulations that govern superannuation in Australia; to avoid any penalties, or even worse – criminal charges being laid for missing a step or not providing the correct information.

  1. First and foremost you’ll have to have pay all members from the benefits, and then transfer the remaining money to some other kind of superannuation fund, depending on whether you’ve reached retirement age or not.
  2. Anything you can’t transfer because it’s a type of investment that can’t be easily converted into cash (stocks, bonds, real estate, etc) will need to be sold off, and you’ll have to transfer the profits made from those sales into the new fund.
  3. After you’ve paid out all benefits and transferred the remaining money, the next step is to arrange a final audit. As part of the SMSF audit process, you’ll be called in to review everything that happened, and only once the audit is complete and you’ve signed off on it, can you put in your final annual return.
  4. The last step in the process of getting out of a SMSF is to contact the ATO (Australian Tax Office) and submit the final annual return. You have to contact the ATO within 28 days of winding up the SMSF, and then you have to file a final return for the SMSF account and pay any taxes that are still owed. After the final return has been filed the ATO will send you a letter informing you that they’re aware the account is now closed, and that the business number attached to the account has been deleted.

Getting out of an SMSF isn’t an easy process. If you find yourself needed to do this, then you should contact our superannuation experts today and learn more about how we can help ease the entire process for you.

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