|September 15, 2016||Comments Closed|
Superannuation is perplexing enough, not to mention when you should think about Bankruptcy also. At Bankruptcy Experts Bendigo we often have a lot of people talking to us about what can happen to their super, and if you possess a regulated or industry fund (like most superfunds) then your super is secure, and Bankruptcy will have no influence upon your super. However, if you possess a Self-Managed Super Fund then you might get some troubles because there are various things you can not do when bankrupt related to the management of finances.
This is really an increasing concern with a number of Australians in the last few years; the ATO informs us it has increased Australia-wide from 758,589 in 2009 to 1,011,689 in 2014. So what happens to these Superfunds when it comes down to Bankruptcy?
As I suggested earlier, a basic solution to your SMSF concern is to put your super back into a standard regulated managed fund before personal bankruptcy and save yourself all the issues described above.
First and foremost, if you are taking into account Bankruptcy, you can not be a part of a SMSF. Why? Considering that if you are going up against personal bankruptcy, you will be grouped as a ‘disqualified person’. And a disqualified person can not function as an Individual Trustee. This poses a complication because typically most of the SMSFs are just 2 people, which means both of these participants must also be the individual trustees. The position of trustee sets a bunch of legal rules, and if you are in this position I would highly advise you to be aware of them all– as an example the fact that you can not ‘know or suspect’ that one of you are insolvent. So you can notice how an individual insolvency could be somewhat damaging to a SMSF and as you can imagine the process of Bankruptcy for a SMSF is somewhat convoluted.
Regardless if you contact us or somebody else it does not matter, just please don’t step into bankruptcy blind when it concerns your SMSF. In reality because Bankruptcy is so complicated with SMSFs we urge you to get both legal and financial assistance before proceeding with any one of the steps pointed out in this short article.
So what occurs if one of the members of an SMSF does enter Bankruptcy?
For starters, the SMSF will need to be restructured. This means that you will want to think about your entire structure and make certain it is satisfying the basic terms, consisting of points like maintaining a new trustee that is not dealing with problems with Personal bankruptcy. The Australian Tax office will provide you a 6 month ‘grace period’ in order to get this accomplished before you face penalties. And consider, sometimes the most optimal plan would be to simply roll the fund into an industry or corporate fund.
Beyond these large-scale restructuring issues, there is a great deal of paperwork to cope with too, and you have to be continually keeping the ATO informed of what is happening. This indicates you have to let them know that you have a bankruptcy issue with your current trustee, that they are being eliminated as soon as possible and let them know who the new trustee/director is. The Insolvent will also have to inform the ATO using the form NAT 3036 (Found on the ATO website) and they will need to also notify ASIC of their resignation.
During that 6 month time you will have to remove the Bankrupt from the SMSF– including their property and assets. Keep in mind if you are not sure call Bankruptcy Experts Bendigo for some free recommendations on 1300 818 575.
What happens if I use a single member fund?
However, if you are a single member fund the Bankruptcy will be a little bit varied as you will want to designate a new director (because it can not be you any longer) you will need to make a great deal of tough decisions with this and so consulting with a professional is going to be important. You can get in touch with Bankruptcy Experts Bendigo for some free advice on 1300 818 575.
From that you can acknowledge how when it comes to Bankruptcy, although one single member is managing troubles, it can affect the very existence of an SMSF. If you are at this moment facing this matter yourself, or with a partner in a SMSF, feel free to get financial advice to make sure you are satisfying the ATO needs.
Bankruptcy is certainly never easy, but getting correct recommendations is the most effective first step. If you would like to talk about your approaches further, give us a call at Bankruptcy Experts Bendigo or visit our website: www.bankruptcyexpertsbendigo.com.au or just call us on 1300 818 575.