SMSF – Vesting Deed. Wind up your Self-Managed Super Fund
Self Managed Super Fund Vesting Deed – wind up your Self-Managed Super Fund
For whatever reason, you may find that you no longer wish to keep your Self-Managed Super Fund going. If this is the case, you need to wind it up.
You will need to generate an SMSF Vesting Deed which will formally wind up (vest) the Self Managed Super Fund.
Why should I wind up the SMSF?
• The relationship between members or directors has changed – fighting, divorced or dead
• You no longer have the time or interest to run the SMSF – working or travelling
• The fund’s investments are managed more effectively and cheaper with a public offer fund
• Your circumstances changed which affects your capacity to manage the SMSF – sick, dementia
• The laws and regulations governing SMSFs are too complex, and the effective management of the SMSF investments requires time and expertise, which the trustees does not have or has lost interest
• All the members and trustees left the SMSF, or want to leave – transferred their benefits to another fund or died
• The SMSF has paid the members all of their benefits.
• One or more of the SMSF trustees have moved overseas – no longer a ‘resident regulated superannuation fund’
• Not enough money left in the SMSF to make it viable
Two alternatives to winding up an SMSF:
1. Appointing a Legal Personal Representative as Trustee
2. Small APRA Fund (this is rarely ever done, becuase these professional trustee companies are expensive and show little flexibilty)
What do I need to do to terminate the SMSF?
1. You will need to pay out or roll over the balance of members’ super to another fund, which may involve selling assets.
2. A final audit must be completed before you lodge the last SMSF annual return. Remember to indicate the fund is being wound up.
3. You need to pay any outstanding tax and other debts before you close your fund’s bank account.
4. A resolution must be passed determining that the Fund is to be vested (terminated).
5. The final accounts of the fund must be prepared.
6. Build our Deed of SMSF Vesting – this vests and closes the Self Managed Super Fund.
7. Notify the ATO within 28 days stating: SMSF Name, ABN, contact person, date wound up. Send this information to: ATO, PO Box 3578, ALBURY NSW 2640 (The ATO cancels your ABN for you.)
After building the SMSF Vesting Deed on our website you are emailed within a few seconds:
1. Self Managed Super Fund – Deed of Variation of Vesting
2. Minutes
3. Letter of Advice on the law firm’s letterhead signed by a Partner
Retaining documents
Even though your fund is wound up, you still retain these records for a minimum of 10 years:
* minutes of meetings regarding the fund
* notices of the change of trustees or directors of the corporate trustee, and consents to be SMSF trustees
* copies of member and beneficiary reports.
Retain financial statements for 5 years.
QUESTION
My question is how can I go about closing down my SMSF and can you help with that?
I try reaching out to the people that convinced me to open it up but I feel they are not interested in helping me.
Answer:
Self-Managed Superannuation Funds are like one-day-old babies. They need a lot of love and attention. They are time-consuming and expensive.
It seems that you may not have got good advice about why you should have got one. That is sad.
You need to go through a strict set of rules about winding it up and rolling over the superannuation to another fund.
This document takes you through the process. However, you or your accountant need to provide a balance sheet to show that the SMSF has no funds left in it. And you need an auditor to do the last audit of the fund.
You have a journey ahead of you.
Have a look at the Sample document and there are many training videos and hints to help you as you build the document.
For more legal advice telephone us. We are a law firm. We can help you answer the questions to build the SMSF Vesting Deed.
Adjunct Professor, Dr Brett Davies, CTA, AIAMA, BJuris, LLB, LLM, MBA, SJD
Legal Consolidated Barristers and Solicitors
39 Stirling Highway, Nedlands, WA
National Australian law firm
Mobile: 0477 796 959
National: 1800 141 612
Direct: 08 6389 0400
Email: [email protected]
Skype: brettkennethdavies
A Vesting Deed is used when you no longer want the Self-Managed Super Fund. You roll over the funds in your SMSF into another complying superannuation fund. This could be a retail or public offer fund. You need to formally wind up (vest) the trust to close down this unused structure.
Why should I wind up the SMSF?
– The Trust has achieved its original purpose
– It has no assets
– The trust has reached its vesting date
What do I need to do to terminate the SMSF?
1. The capital of the trust must be distributed in accordance with the trust deed.
2. The Trustee satisfies any existing liabilities of the trust. This includes any existing or future
tax liabilities that arise as a result of the termination of the SMSF.
3. The Trustee passes a resolution determining that the trust is to be vested (terminated).
4. The final accounts of the trust, including a final tax return, are prepared.
Once this is done, you build our Deed of Vesting of an SMSF. You gt a set of documents which allows you to vest and close the SMSF.
After building this document on our website you are emailed:
1. SMSF Deed of Variation of Vesting
2. Minutes
3. Letter of advice
Why should I wind up the SMSF?
– The Trust has achieved its original purpose
– It has no assets
– The controllers of the trust don%u2019t want to continue
– The trust has reached its vesting date
What do I need to do to terminate the SMSF? Why vest?
1. The capital of the trust must be distributed in accordance with the trust deed.
2. The Trustee must satisfy any existing liabilities of the trust. This includes any existing or future
tax liabilities that arise as a result of the termination of the trust.
3. The Trustee must pass a resolution determining that the trust is to be vested (terminated).
4. The final accounts of the trust, including a final tax return, must be prepared.
5. Build this document
To vest your SMSF, we need to first identify it. We do this by referring to:
the SMSF Trust name (e.g. Jones SMSF)
date the SMSF Deed, that established the Self-Managed Superannuation Fund, was signed
Every trust has a name. Sadly, they are generally quite boring. E.g. Smith SMSF, named after Mr Smith.
The SMSF name is a ‘nickname’. It is not registered anywhere. It just helps you and your accountant identify your SMSF.
Take out your Deed of Trust that first started your SMSF. Have a look at the front cover, it will normally have the name of your SMSF. It is repeated in the body of the Deed as well. Check any subsequent Deeds of Variation, to make sure that your SMSF didn’t change its name.
Be careful to not confuse the SMSF name with your Trustee. Your Trustee (e.g. XYZ Pty Ltd) is not your trust name.
Because you are building your Deed of Variation at our law firm’s website you:
1. retain legal professional privilege
2. are protected by our law firm PI insurance
3. receive legal advice
4. by law have us act in your best interests, over our own
Only a law firm provides the above.
