How to wrap up your SMSF
Generally, the first time you set up an SMSF it is because it meets your needs at the time, but that may change and require “resolution”.
If your life situation changes, you may need to change or terminate your SMSF. You should regularly review your situation and decide whether to continue with your SMSF or to end it. Maybe you get divorced, a trustee dies, trustees argue, or you move abroad … or you just don’t want to manage yourself anymore. There are all sorts of reasons to complete an SMSF and most depend on personal choices.
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Base criteria: a loan amount of $ 400,000, variable, fixed, amortization and interest (P&I) home loans with a loan-to-value (LVR) of at least 80%. However, the Home Loans Compare table allows calculations for variables selected and entered by the user. All products will list the LVR with the product and price clearly posted on the product supplier’s website. The monthly repayments, once the basic criteria have been changed by the user, are based on the advertised rates of the selected products and are determined by the loan amount, repayment type, loan term and LVR as entered by the user / you. * The settlement rate is based on a $ 150,000 loan over a 25 year period. Please note that the comparison price is only valid for the examples given. Prices valid from October 13, 2021. Show disclaimer.
What should be considered when processing an SMSF
There are a few scenarios and open questions that could cause a trustee to end their SMSF:
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Do I know the trustee’s duties and responsibilities well?
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Do I have the time to run the SMSF?
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Are SMSF’s ongoing charges higher than I’d like to pay, or would another super fund cost less?
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Can I continue to manage the fund’s investments effectively or would I achieve higher returns if my Super were managed in a different type of fund?
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Do I want to keep taking responsibility for managing the fund, including paying fines if things go wrong?
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Do all the trustees still agree on how to manage the fund?
How to wrap up your SMSF
If an SMSF is no longer suitable for you, these are the steps to take to resolve it.
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Review the trust deed for any settlement instructions. Any trustee or director should approve the liquidation and document their decision.
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Withdraw members’ funds or transfer them to another fund, which may involve the sale of assets.
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A final examination must be carried out before submitting the final SMSF annual declaration. Designate an SMSF auditor to complete the final audit
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Completion and submission of the final annual SMSF declaration (including settlement details)
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After all expected liabilities have been paid and requested refunds have been received, close the Fund’s bank account.
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Pay any outstanding taxes and other debts before closing your fund’s bank account.
Alternatives to the settlement
If you want to move on with an SMSF but can’t handle the duties and responsibilities, you can switch to a different type of fund, with a licensed trustee assuming the obligations. There would be a cost to doing this, but the time savings can be worthwhile for you. Savings.com.au recommends speaking to an SMSF expert about other types of super funds. They can also help you decide whether an SMSF is still right for you.
Image by Joshua Hoehne via Unsplash
When selecting the above products, the entire market was not considered. Rather, a stripped-down portion of the market was considered, including retail products from at least the four major banks, the ten largest customer-owned institutions, and Australia’s larger non-banks:
Some vendors’ products may not be available in all states. In order to be considered, the product and the price must be clearly published on the product provider’s website.
In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To learn how Savings.com.au handles potential conflicts of interest and how we are paid, please click through the website links.
*Comparison rate is based on a $ 150,000 loan over 25 years. Please note that the comparison price only applies to the examples given. Different loan amounts and terms lead to different comparison rates. Costs such as redemption fees and cost savings such as fee exemptions are not included in the comparison price, but can affect the cost of the loan.