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SMSF wind-ups decrease

SMSF wind-ups

SMSF wind-ups fell below the previous five-year average in 2019/20, while new establishments continued to increase, according to ATO data.

The number of SMSF wind-ups fell in the 2020 financial year compared to the five-year average, with almost 60 per cent being closed during the accumulation period, according to the most recent SMSF sector data from the ATO.

In its statistical overview for 2019/20, the ATO reported that 21,723 SMSFs were established and 15,856 were wound up, with 5867 net establishments during the year.

These numbers represented an increase in net establishments of 3089 in 2018/19 as establishments increased from 20,341 and wind-ups fell from 17,252.

The ATO noted the rate of wind-ups in 2019/20 was below the five-year average of 17,300 for the five years to 2019/20, while across the five years to 2020/21 the number of SMSFs grew by an annual average of 1.7 per cent, with an average of 25,000 new funds established annually.

The overview also found 59.2 per cent of SMSFs where wound up during the accumulation phase compared with 40.8 per cent during the retirement phase, and the average fund existed for 11.5 years from its establishment date.

The regulator also revealed the average number of assets in the year prior to wind-up were $487,000, while median assets were $293,000, which both increased from the last statistical overview for the 2019 financial year.

Retirees that had wound up their SMSFs had on average assets worth $686,974 and median assets within their fund valued at $475,710.

Conversely, average SMSF assets on establishment were $391,000, down 4 per cent from $407,000 in 2018/19, and median SMSF assets on establishment were $260,000, down 3 per cent from $269,000 in 2018/19.

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