SMSF wind-ups drop to historic lows

The winding up of SMSFs fell to its lowest level in more than five years, with less than 130 funds closed in the last quarter of 2018, according to data released by the ATO.

The data showed only 128 SMSFs were wound up in the December 2018 quarter, while 4296 funds were established, leading to a net establishment figure of 4168.

The low level of wind-ups followed a similar pattern in the September quarter where only 389 funds were closed, while 6138 were established, for a total net establishment of 5749.

Collectively, the two quarters represent an increase in net establishments over the second half of 2018 after the previous 12-month period delivered a dramatic decrease in net establishments.

In its figures, the SMSF regulator reported a total of 18,580 wind-ups for the year to June 2018, as compared to 13,263 for the year to June 2017.

This resulted in net establishments falling from 17,268 in 2017 to 6878 in 2018, however, a large number of wind-ups occurred in the September 2017 quarter due to the ATO’s cancellation of Australian business numbers for around 9000 SMSFs.

Despite the dip in establishments across 2018, the total number of SMSFs increased to 597,009 as at 31 December 2018, compared to 583,697 at 31 December 2017.

Total SMSF members also increased to 1.127 million at the end of 2018 compared to 1.101 million at the end of 2017.

“Quarterly establishments and wind-ups for recent quarters may be understated because there is often a time lag between when this event occurs and when we receive notification from the SMSF. It is anticipated that the number of June 2018 quarter establishments and particularly wind-ups will increase as more notifications are received,” the regulator said.

“Generally the ATO receives wind-up notifications as at the end of the financial year so the June quarters have significantly larger wind-ups than other quarters.”

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