Superannuation is perplexing enough, not to mention when you need to worry about Bankruptcy as well. At Bankruptcy Experts Whitsundays we frequently have individuals talking to us about what can occur to their super, and if you possess a regulated or industry fund (like most superfunds) then your super is secure, and Bankruptcy will likely have no impact upon your super. However, if you possess a Self-Managed Super Fund then you may discover some problems because there are a number of things you can not do when bankrupt related to the management of finances.

This is actually a growing concern with a number of Australians in the last few years; the ATO tells us it has developed Australia-wide from 758,589 in 2009 to 1,011,689 in 2014. So what occurs to these Superfunds when it comes down to Bankruptcy?

Bankruptcy Experts Whitsundays

As I recommended previously, a fundamental option to your SMSF concern is to put your super back into a normal regulated managed fund before bankruptcy and save yourself all the troubles outlined above.

Firstly, if you are considering 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 operate as an Individual Trustee. This leads to 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 great deal of legal guidelines, and if you are in this position I would highly advise you to be familiar with them all– as an example because you can not ‘know or suspect’ that one of you are insolvent. Therefore, you can observe how an individual bankruptcy could be rather damaging to a SMSF and as you can imagine the process of Bankruptcy for a SMSF is rather complicated.

Regardless if you contact us or somebody else it does not matter, just please don’t walk into insolvency 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 of the actions suggested in this short article.

So what takes place if one of the members of an SMSF does enter Insolvency?

For starters, the SMSF will need to be reorganized. This means that you will wish to think about your whole structure and make sure it is meeting the basic conditions, incorporating things like maintaining a new trustee that is not dealing with problems with Bankruptcy. The Australian Tax office will provide you a 6 month ‘grace period’ to get this accomplished before you face penalties. And take into consideration, sometimes the most ideal plan would be to just roll the fund into an industry or corporate fund.

More than these large-scale restructuring troubles, there is a huge amount of paperwork to cope with too, and you have to be continuously keeping the ATO informed of what is occurring. This shows you have to let them know that you have a bankruptcy issue with your current trustee, that they are being eliminated as quickly as possible and let them know who the new trustee/director is. The Insolvent will additionally need to update the ATO using the form NAT 3036 (Found on the ATO website) and they have to also notify ASIC of their resignation.

Throughout that 6 month period of time you will have to remove the Bankrupt from the SMSF– including their property and assets. Keep in mind if you are uncertain call Bankruptcy Experts Whitsundays for some complimentary suggestions on 1300 795 575.

What happens if I use a single member fund?

However, if you are a single member fund the Bankruptcy can be a bit different since you will want to appoint a new director (because it can not be you any longer) you will need to make a lot of hard choices with this and so consulting with a specialist is going to be vital. You can phone Bankruptcy Experts Whitsundays for some free assistance on 1300 795 575.

From that you can acknowledge how whenever it comes to Bankruptcy, although one single member is taking care of troubles, it can have an effect on the very existence of an SMSF. If you are at this moment facing this concern yourself, or with a partner in a SMSF, please seek financial advice to make sure you are fulfilling the ATO demands.

Bankruptcy is certainly never uncomplicated, but getting proper guidance is the best initial step. If you want to talk about your choices further, contact us at Bankruptcy Experts Whitsundays or visit our website: or just call us on 1300 795 575.