A leading industry practitioner has labelled the ATO guidance produced for trustees regarding SMSF wind-ups as unworkable from an auditor’s perspective.
“So the guidance for the trustee was that you should pay out or roll over your super but leave enough money in the bank to cover everything else. That was my problem number one [with the guidance] because then you leave the money in the bank and how do I as an auditor sign off that the financials are fairly stated with zero assets and zero liabilities, [but] with $10,000 in the bank account? I can’t do that,” Super Sphere director Belinda Aisbett told delegates at the recent SMSF Association 2020 National Conference on the Gold Coast.
Aisbett revealed many accountants present Super Sphere with financial statements relating to an SMSF wind-ups reflecting a cash balance and nothing else.
“No, you need $10,000 in the bank and $10,000 in liabilities to have a net zero liability position. I’ll sign off on that, but I’m not signing off on zero [assets] and zero [liabilities] if you’ve left the bank account open with cash in it,” she said.
An SMSF, by law, requires a final audit even when it has been wound up, she said. Trustees also need to lodge a final tax return for the fund and notify the ATO that the SMSF has ceased to operate, she added.
She took the opportunity to dispel a misconception she had noticed among practitioners regarding the audit report for an SMSF that has been wound up in the 2020 financial year.
“I had a conversation not that long ago where an auditor was saying ‘all these wind-ups that we’re doing, we can’t really get them done until we get the 2020 audit report’,” she said.
“You don’t need to wait until 2020 to get the next audit report. You can use the current 2019 audit report and just change the date, [for example] for the period ended 10 January 2020, and you can wind the fund up at that point and do your audit up to that point. You don’t need to wait until the next audit report is released.”