ATO, Superannuation

Wind-ups don’t need nil balances

ATO SMSF balances

A balance sheet indicating a fund has zero balances is not required by the ATO for an SMSF wind-up procedure to take place.

The ATO does not require an SMSF to have a balance sheet with nil balances at 30 June before it can be wound up, a technical specialist has said.

“It is acknowledged by the ATO that when you lodge your final SMSF annual return that you may still have some assets, you may have tax payable, you may have some audit fees to pay and those sorts of things, [and] if I’m going to have tax payable [and] audit fees payable, then I’ll obviously have cash in the bank,” Heffron head of SMSF technical and education services Lyn Formica told attendees of a webinar hosted last week.

Formica recommended trustees and advisers who are worried about the regulator’s position on this matter should refer to the ATO website and its wind-up information contained under QC23348, and stipulated the volume of remaining asset and liability balances in question.

“We’re not talking about a large amount of assets. I’m talking about relatively small balances [indicating] we’ve done our best to pay all of the expenses we [received] and clear out the majority of the member benefits,” she noted.

“It’s just a tiny bit of money that’s left over that we’re going to clear out [shortly] after 30 June once we’ve lodged our SMSF annual return and paid our tax or [received] our tax refund.

“So I’m certainly not suggesting you can have $200,000 sitting in the bank account and you take until September to clear it out and still argue that fund was wound up at [the prior] 30 June.”

Aside from acknowledging the ATO’s attitude toward fund balances upon winding up, she suggested additional guidance should also be sought.

“I would say [also to] have a talk to your auditor because certainly we want to make sure that we’re on par with the auditor’s conditions,” she advised.

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