It is best to treat it as a process that happens over a few financial years to get the best tax outcomes.
Most people who set up a self-managed superannuation fund hope to keep it running for their whole lives; probably a little longer, as in however long it takes their beneficiaries toSome people wind up their SMSF during their lifetime to save tax for the next generation.But just because an SMSF was a great idea when it was set up doesn’t mean it will stay that way forever. So, what might prompt winding one up?” but in fact, that’s not a bad place to start.
One is that when couples have an SMSF together, there is almost always one person more engaged than the other. If the “interested in SMSFs” person dies, it’s common for the survivor to wind up the fund. That often depends on age. Someone who loses the “active” spouse in their 50s probably won’t wind up the SMSF – they will just learn how to manage it and perhaps surprise themselves with their own capability. But someone aged in their 90s might make a different decision.
Remember that often it is fine to have a small balance when the fund is growing – for example, the members are saving hard and adding more contributions as often as they can. That is because it is clear there is a point at which the costs will become relatively cheaper and getting in a little too early can mean tax savings over the long term.
Let’s say there is only one member of the fund and he or she has no one who is classified as a “dependant” for tax purposes. Instead, all their super will go to their adult financially independent children.