Key Highlights

  • Unpaid invoices and tax balances are a common reason a wind-up drags on.
  • A documented cash buffer helps cover final costs.
  • Refunds the fund cannot keep must be rolled over, and the bank account stays open until the ATO confirms closure.

The most common reason an SMSF wind-up drags on is not a complicated asset. It is a loose financial thread: an unpaid invoice, a tax balance that has not cleared, a refund heading to a closed bank account. Tidying these up in the right order saves time and stress.

This is evergreen guidance based on the ATO's wind-up page (last updated 2 April 2025) and its annual return lodgment page (last updated 24 August 2026).

Pay what the fund owes

The ATO's guidance says trustees should pay final invoices, the expenses of selling assets and any outstanding tax, such as PAYG instalments, PAYG withholding and capital gains tax. Trustees can check balances through Online services for business, by contacting the ATO or through their tax professional, and can ask for any refunds due.

A fund cannot be closed while it still has credit or debit balances with the ATO. So the aim is a zero balance, with refunds received and debts cleared, before the account is closed.

Keep a cash buffer

The ATO also recommends that trustees retain enough cash to cover costs that arise after lodgment, including audit fees, SMSF professional fees and tax. It is tempting to pay out every dollar to members as soon as the last asset is sold. The ATO's approach suggests holding back an amount sized to the remaining costs, and documenting how it was estimated.

The supervisory levy

Every SMSF pays a supervisory levy through its annual return. For a fund that is winding up, the ATO's lodgment page explains that it does not pay the levy if it paid it in the previous financial year, and that Label M lets a fund that wound up during the year adjust the levy so it is not charged for the following year. The ATO's wind-up page confirms trustees complete this adjustment on the final return and that the amount is found in the supervisory levy table in that year's return instructions.

Trustees should read the current instructions rather than rely on a figure quoted elsewhere. Levy details deserve a direct check.

Refunds the fund cannot keep

One point is easy to overlook. The ATO says if a fund receives a refund it is not eligible to keep, it must be rolled over immediately, via SuperStream, and before the ABN is cancelled. The ATO also mentions the SMSF member TICK service, which can validate a member's tax file number before rollovers.

Reporting that supports the tax position

Tax and reporting travel together. The ATO says all reporting should be finished before the final return. That includes PAYG withholding reporting and issuing payment summaries to members who received retirement benefits, so that individual returns can be pre-filled. Trustees should also check GST and BAS obligations if the fund is registered.

Transfer balance reporting is part of this picture. The ATO says to end any pension before winding up, report commutations and lodge transfer balance account reports as soon as possible. Where benefits are rolled over to an APRA-regulated fund, early reporting helps avoid a double count that could cause over-taxation.

The bank account goes last

Direct debits, refunds and incoming rollovers all pass through the fund's bank account. The ATO's advice is to close it only after final liabilities are paid, all ATO refunds have been received to the right bank details, SuperStream rollovers are complete and the ATO has confirmed the wind-up. Closing early can delay the process and prevent refunds arriving. The ATO's guidance for auditors also notes that if the account stays open after the audit, the auditor may need written representations that later transactions will follow super law, and may qualify the report.

Before closing, cancel or redirect direct debits for platform fees, insurance premiums, accountant instalments and any other regular payments. This is a general practical suggestion rather than an ATO requirement, but it reduces the risk of stray transactions after the audit date.

A hypothetical checklist

Imagine trustees who have sold all assets and paid members. They might list: outstanding invoices, last tax instalments, expected refund, levy adjustment, audit and accountant fees, final bank interest, and who will receive any refund that lands later. This is a hypothetical illustration, not a real case.

Takeaway

Plan for final tax and costs, leave a documented buffer, complete the levy adjustment as the ATO instructs, roll over any refund the fund cannot keep, and leave the bank account open until the ATO confirms closure. Trustees unsure of any balance should ask the ATO or a registered tax professional.