Please be advised
We have created the Wind Up Wizard, which has been designed to simplify the Wind Up process within Simple Fund 360.
Overview
Winding up of a super fund requires dealing with and disposing of all of the fund's assets so that none remain, and completing all the reporting and administrative obligations of the fund:
- Complete any requirements that the trust deed specifies about winding up the fund;
- The trustees need to arrange for all investments to be sold and deposit the money into the super fund’s bank account;
- Payout or roll over all super benefits (leaving a sufficient amount to pay final tax or expenses if required);
- Appoint an approved SMSF auditor to complete the final audit;
- Complete and lodge the final SMSF annual return (including wind up details);
- Pay any outstanding tax liabilities of the fund;
- After all expected liabilities have been settled and requested refunds are received, close the fund’s bank account.
Summary
Winding up Funds in SF360:
There are four main steps that should be followed when winding up a superannuation fund in SF360:
- Process ALL transactions for the fund
- Reverse Tax Effect Accounting (Optional)
- Enter an end date for the fund (Note: For member balances being rolled out via SuperStream, this step is completed after final create entries.)
- Perform create entries
- Clear any amounts in clearing accounts
Step 1 - Process all transactions for the fund
The first step to winding a fund up requires all of the entries for the current period (up to the date of the wind up) to be processed via manual Transaction Input or uploaded and matched using SF360's Connected Services and Smart Matching features.
- All disposals of Assets will need to be processed so the investments show nil quantities. SF360 will then know to reverse any revaluation/devaluation differences when the final create entries is processed.
- Turn off Tax Effect Accounting (if applicable)
- Where a member is in receipt of a pension, ensure that the minimum pro-rata pension payment has been paid
- For Pension funds, ensure that fund has applied for and received an actuarial certificate. See Fund Pension Policies
- Where the fund is paying market Linked or defined benefit pensions, this pension will need to be transferred to another complying super fund.
Example 1: On the wind up date of 25 May 2015, an accumulation fund with assets below is to be rolled over to a new superannuation account.
- 1,000 units of shares at $29.48 per share (originally purchased at $50 per share)
- Fund Bank Account of $150,000
- A property to be sold for $605,000 (Book value at $585,000)
From Main Toolbar, select Accounting - Transaction List. Select Journal from the drop-down list.
Put the transaction date as of the wind up date, credit all investments and post to Account Code 99900 (Manual Suspense Account) in order to process disposals. All Units on hold need to be filled in the Units field to trigger a full disposal. (Note bank accounts are recommended to be processed at the last step as this would show the final figure to pay out to the members)
After completing the journal, the transaction can be found below. Note net gain/loss on disposal will be automatically calculated and posted to Account Code 24700 (Changes in Market Values of Investments).
Simple Fund 360 will automatically generate Member Payout transactions upon the final create entries in Step 4.
Step 2 - Reverse Tax Effect Accounting (Optional)
Tax Effect Accounting
Please ensure that Tax Effect Accounting has been turned off for the fund prior to completing this step.
See Tax Effect Accounting for more details.
Confirm the amount of PDIT to write back by checking account 89000 in Simple Fund 360's Live Reports screen. The amount to writeback will be the opening balance of the 89000 account for the year the fund is being wound up in.
Once this amount has been confirmed, refer to Writing back tax deferred amounts for details on writing back this amount.
Step 3 - End dates for fund
Record an end date for the fund.
For recording a wind up date for a fund, please refer to: Fund wind up date
Fund Windups under SuperStream
Where a fund is being wound up and the member balances are to be rolled out via SuperStream in Simple Fund 360, skip this step, and proceed to the next step of final create entries without first entering the fund windup date.
Step 4 - Create Entries
Create entries will need to be processed. Refer to the below two scenarios on how create entries is to be performed.
Where a fund wind-up date has been entered (as per the previous step), complete create entries to the fund windup date.
Simple Fund 360 will then automatically generate member payout transactions. These can be seen in the Transaction List.
The date of this automatically generated transaction can be changed if needed to match a rollout date prior to the wind-up date.
Example: A fund with a pension and accumulation account to wind up.
Please note the transactions above are system generated, though users can still update the Type of Payment by selecting beside the figures, where "Transferring from one Super Fund to another" can be selected under Type of Payment in the Rollover Payment Details panel. This would allow a Rollover Benefits Statement to generate. For more detailed instructions, also check How to process a rollover payment
Please Note
Once the Type of Payment is updated above, the system would also create a TBAR event. If users wish to reverse the create entries at this stage, that TBAR event has to be deleted manually first, otherwise a warning will display. For instructions on how to delete a TBAR event, please refer to Transfer Balance Dashboard
Step 1: Complete create entries to the 30th of June. For more information on the create entries process, click here.
Step 2: Generate the Member Statement and get the latest member balance taking into account all tax calculations. For more information on generating the report, click here.
Step 3: Proceed to rollover the member balances via SuperStream in Simple Fund 360 as per the member statements. For more information, click here. (Users may need to manually update the transfer out amount).
- Simple Fund 360 supports rollouts for both Accumulation or Pension member accounts through SuperStream.
Example
When processing create entries as at 30/06/XXXX, this will account for appropriate member profit and tax calculations. However, the post create-entry member balance may not be updated when selecting the member account in the Superstream drop-down list (see image below).
Where the amount differs (higher or lower than the member statement figure), users then need to manually update the request amount and components per member statement on the Superstream request.
For example, total benefits as per the below member statement after 30th of June create entries is $100,577.11
However, the member account from the Superstream drop-down list still displays the current balance of $99,366.
The Requested Amount on the Superstream rollover page needs to be manually updated per the Member Statement balance of $100,577.11. Corresponding tax components may also need to be manually updated per the Member Statement where relevant.
Simple Fund 360 will then automatically generate member payout transactions. These can be seen in the Transaction List.
Example: A fund with an accumulation account to wind up.
| Account 46000/MemberCode - Transfer out | $100,577.11 | |
| Account 94920 (Member Data Clearing Account) | $100,577.11 |
Transaction will automatically match when using Bank Data Service.
Step 4: Proceed to reverse the create entries process to enter in a fund windup date. For recording a wind up date for a fund, please refer to: Fund wind up date
Step 5: Once completed, create entries to the fund windup date.
In this example, the Income Tax Payable is $3,554.89 as shown in the Annual Return.
Clear any suspense accounts
Finally, you will need to clear any suspense accounts and adjust the bank account to reflect the tax payable/refundable amounts.
This can be done by posting the following journal:
| Account | DR | CR |
|---|---|---|
| Manual Suspense Account - 99900 and/or 94920 - Member Data Clearing Account | $100,577.11 | |
| Bank - 60400/Bank | $97,022.22 | |
| Income Tax Payable/Refundable - 85000 | $3,554.89 |
*Note: When generating the Statement of Financial Position, the profit and loss not allocated can be ignored. This will automatically balance when the manual suspense account is cleared.
To view the:
- Lump Sum Prepayment Form
- PAYG Payment Summary
Click to open up the member payout transactions generated by Simple Fund 360 on the Transaction List page, then click on Save and select Save & Prepare Documents.
Electronic Lodgement
Where an SMSF is wound up during the Current Financial Year, you will be able to prepare the prior year's SMSF Annual Return and lodge it through Simple Fund 360, if the Annual Return for the Current Financial Year is not yet available.
Members Statement
After completing the fund wind-up steps, please ensure that the member components in the Members Statement are all 0.
If these member components are not 0, you will need to clear out the member components. To clear out the members components, use the Update Member Components feature to set all member component amounts to 0.
Please refer to Update Member Components for more information.