Closing SMSF

The decision to close your SMSF should not be made lightly, as it cannot be undone.

That’s why it is important that you understand exactly what you need to do before you start withdrawing all your funds. If you don’t wind your SMSF up properly, there may be penalties involved.

Steps in closing SMSF

Check the Trust Deed

The first place to refer to should be the SMSF trust deed, as this may contain certain requirements regarding the wind-up process.

Obtain written agreement from members to close the fund

Each trustee/ member should sign an agreement to wind-up an SMSF, and it should be agreed whether the trustee company needs to be closed as well.

Confirm with members how they would like payment of their existing benefits

Each member needs to advise whether they want their benefits to be rolled over to another super fund of their choice or to be paid out to them as a lump sum or in-specie transfer (they need to satisfy condition of release first).

Finalise outstanding tax and compliance obligations, and arrange for final audit and financial statements

Ensure that the financials are audited and no outstanding obligations exist when the fund is closed.

Transfer assets out of the fund

Assets must be either sold to enable payments / rollovers of the funds, or can be transferred in specie to the members.

Lodge the final annual return

An SMSF trustee should prepare and lodge its final annual return with the ATO, ensuring proper completion of the relevant section, confirming the fund is being wound up.

Notify the ATO in writing of the wind-up

Once the SMSF is wound up, the SMSF must notify the ATO in writing within 28 days.

Once accepted but the ATO, the SMSF’s ABN iscancelled and that the record of the SMSF on the ATO’s system has been closed.



Frequently Asked Questions

No, you do not pay the ATO levy with the final annual return.

A member’s personal circumstances may relate to the death of the last member of the fund, a marriage breakdown, or that an SMSF is no longer the ideal vehicle for a member’s superannuation benefits.

Yes, if the fund is non compliant.

For example the fund fails the residency requirements, a member becomes a disqualified person or the ATO issues an SMSF with a direction to wind-up.


Once the SMSF has been wound up, the fund cannot be re-activated or re-opened. On winding up, the SMSF ceases to exist as a legal and tax entity under the SIS and income tax legislation and trust law. The option available to the same fund members would be to start up and establish a new SMSF under a new trust deed.

When considering winding up the SMSF, the ability to change the membership of the SMSF should not be overlooked. The new members can be children or other relatives, or even business associates of the current members. These new members can:

  • Take advantage of an SMSF’s tax position whether that is carried forward capital or tax losses, or the deferment of capital gains tax by not having to dispose of SMSF assets.
  • Facilitate the orderly transfer of business assets from one generation to the next without triggering the disposal of an asset for CGT
  • Consider investing in listed shares, using dividends as cash flow and franking credits to offset the SMSF’s tax liability with the benefit of a refund of any excess franking