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Bankruptcy and Superannuation.

Superannuation is perplexing enough, not to mention when you need to worry about Bankruptcy also. At Bankruptcy Experts Gladstone we frequently have individuals talking to us about what may take place to their super, and if you possess a regulated or industry fund (like most superfunds) then your super is safe, and Bankruptcy will likely have no impact upon your super. Having said that, if you possess a Self-Managed Super Fund then you might discover some problems because there are certain things you can not do when bankrupt surrounding 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 occurs to these Superfunds when it comes down to Bankruptcy?

As I suggested previously, a basic solution to your SMSF problem is to put your super back into a standard regulated managed fund prior to bankruptcy and save yourself all the issues outlined above.

Firstly, if you are taking into account Bankruptcy, you can not be a part of a SMSF. Why? Considering that if you are confronting bankruptcy, you will be grouped as a ‘disqualified person’. And a disqualified individual can not operate as an Individual Trustee. This leads to a problem because normally most of the SMSFs are just 2 people, which implies both of these users 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 strongly urge you to be acquainted with them all– as an example the fact that you can not ‘know or suspect’ that one of you are bankrupt. So you can observe how an individual insolvency can be somewhat damaging to a SMSF and as you can picture the process of Bankruptcy for a SMSF is somewhat complicated.

Irrespective if you contact us or somebody else it does not matter, just please do not step into insolvency blind when it relates to your SMSF. In reality because Bankruptcy is so complicated with SMSFs we urge you to get both legal and financial recommendations before proceeding with any one of the decisions indicated in this short article.

So what takes place 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 certainly want to consider your whole structure and make certain it is meeting the basic conditions, consisting of points like having 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 accomplished before you face punishments. And take into consideration, in some cases the most ideal plan would be to just roll the fund into an industry or corporate fund.

Beyond these large-scale restructuring problems, there is a lot of paperwork to cope with too, and you have to be constantly keeping the ATO updated of what is occurring. This suggests you need 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 notify the ATO using the form NAT 3036 (Found on the ATO website) and they need to also notify ASIC of their resignation.

During that 6 month time frame you will have to remove the Bankrupt from the SMSF– including their property and assets. Bear in mind if you are uncertain call Bankruptcy Experts Gladstone for some free recommendations on 1300 795 575.

What happens if I use a single member fund?

On the other hand, if you are a single member fund the Bankruptcy will be a bit diverse as you will want to appoint a new director (because it can not be you anymore) you are going to need to make a great deal of difficult decisions with this and so contacting a professional is going to be important. You can easily phone Bankruptcy Experts Gladstone for some free advice on 1300 795 575.

From that you can notice how when it comes to Bankruptcy, despite the fact that one single member is managing troubles, it can influence the very existence of an SMSF. If you are at this point facing this matter yourself, or with a partner in a SMSF, please get financial advice to make sure you are fulfilling the ATO requirements.

Bankruptcy is never uncomplicated, but finding appropriate suggestions is the very best initial step. If you wish to talk about your approaches further, contact us at Bankruptcy Experts Gladstone or visit our website: or just call us on 1300 795 575.