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My wife and I are trustees of a SMSF and approaching 80. She is in pension phase, I am in accumulation phase. We need to plan to wind up the SMSF and transfer to Industry funds which will only accept a cheque with a Rollover Benefit Statement (RBS). I am told an interim set of accounts is needed (not cheap) to produce a RBS. With the prospect of market volatility, I would like to transfer in at least 2 cash parcels to minimise market risk. I have my annual accounts completed by 30/8 each year and have only one stock that has a dividend payment before 30/8.
Against this background I would hope that the following approach would work and my question is will it:
1. As soon as 2018 accounts are done (by 30/8/18) use end of year figures for the RBS to transfer my wife’s funds to her industry fund.
2. As soon as 2019 accounts done , use end of year figures for the RBS to transfer my funds to my industry fund. If the 2019 accounts show there is a small amount left belonging to my wife, transfer it to her industry fund.
3. Close the SMSF.
In short, I am trying to minimise the cost and work involved in preparing interim sets of accounts, the time between getting an RBS, selling shares, and acceptance by the industry fund, and need for extra actuarial certificates.
A: Thanks for the question.
The winding up of the fund may work as proposed, however, you may find that accounts and regulatory returns will be required for the 2017/18, 2018/19 and 2019/20 financial years. The reason is that the dividends received by the fund in August 2019 will be assessable income to the fund and would require lodgement of a return for that year and notification that the fund has been wound up.
There may be a number of alternatives which may prove less costly, however, would need to be balanced with the investment risk that you are taking into consideration. I suggest to have a chat with your accountant or tax agent who may be able to provide an objective assessment on the most cost efficient way to transfer the benefits of you and your wife to the industry fund.
