Superannuation is perplexing enough, not to mention when you need to stress over Bankruptcy as well. At Bankruptcy Experts Brisbane we often have individuals questioning us about what may happen to their super, and if you have a regulated or industry fund (like most superfunds) then your super is secure, and Bankruptcy will have no impact upon your super. Nonetheless, if you possess a Self-Managed Super Fund then you might get some troubles because there are a number of things you can not do whilst 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 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 fundamental solution to your SMSF problem is to put your super back into a typical regulated managed fund prior to bankruptcy and save yourself all the issues outlined above.

First and foremost, if you are thinking about Bankruptcy, you can not be a part of a SMSF. Why? Considering that if you are going up against bankruptcy, you will be grouped as a ‘disqualified person’. And a disqualified individual can not operate as an Individual Trustee. This leads to a complication because generally most of the SMSFs are just 2 individuals, which implies the two of these members 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 become acquainted with them all– for instance the fact that you can not ‘know or suspect’ that one of you are insolvent. So you can notice how an individual bankruptcy could be rather harmful to a SMSF and as you can imagine the process of Bankruptcy for a SMSF is somewhat convoluted.

Regardless if you call us or somebody else it does not matter, just please don’t step into bankruptcy blind when it relates to your SMSF. In reality because Bankruptcy is so complex with SMSFs we urge you to get both legal and financial assistance before proceeding with any one of the actions pointed out in this article.

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

For starters, the SMSF will want to be reorganized. This means that you will certainly want to consider your whole structure and ensure it is complying with the basic terms, incorporating things like maintaining a new trustee that is not dealing with issues with Insolvency. The Australian Tax office will provide you a 6 month ‘grace period’ in order to get this done before you face punishments. 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 challenges, there is a huge amount of paperwork to cope with too, and you need to be continually keeping the ATO notified of what is happening. This suggests you need to let them know that you have a bankruptcy problem with your current trustee, that they are being eliminated as soon as possible and let them know who the new trustee/director is. The Bankrupt will likewise need to notify the ATO using the form NAT 3036 (Found on the ATO website) and they will need to also notify ASIC of their resignation.

Throughout that 6 month time period you will have to remove the Bankrupt from the SMSF– including their property and assets. Remember if you are uncertain call Bankruptcy Experts Brisbane for some complimentary assistance on 1300 795 575.

What happens if I use a single member fund?

However, if you are a single member fund the Bankruptcy will be a bit different as you will need to designate a new director (as it can not be you from now on) you are going to need to make a lot of tough decisions with this and so getting in touch with a specialist is going to be important. You can easily get in touch with Bankruptcy Experts Brisbane for some free guidance 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 impact the very existence of an SMSF. If you are at this moment facing this concern yourself, or with a partner in a SMSF, please get financial advice to make sure you are fulfilling the ATO demands.

Bankruptcy is never uncomplicated, but finding proper recommendations is the best first step. If you wish to go over your choices further, contact us at Bankruptcy Experts Brisbane or visit our website: or just call us on 1300 795 575.