Number of SMSFs established reaches new low at end of 2018

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The number of SMSFs being started has continued to shrink in the December 2018 quarter, with only 4,296 funds started according to the latest ATO statistics.

4,296 is the lowest number of new SMSFs started in any quarter since at least March 2008. The December 2017 quarter had 6,249 SMSFs started.

Currently the ATO only has 128 SMSFs winding-up in the December 2018 quarter, though this figure is likely to be revised upwards. An upwards revision would push the net establishment of SMSFs for the quarter – currently at 4,168 – down further.

Because of the way SMSFs are registered and deregistered the wind-up figures are subject to larger revisions than the establishment figures. For instance the latest data revises the wind-ups for the June 2018 quarter up by 2,644, while the establishments were only revised up by 18. Though in the September 2018 quarter revisions were higher for establishments than wind-ups – 558 versus 241.

The ATO says: “Quarterly establishments and wind-ups for recent quarters may be understated, because there is often a time lag between when this event occurs and when we receive notification from the SMSF. It is anticipated that the number of June 2018 quarter establishments and particularly wind-ups will increase as more notifications are received.”

“Generally the ATO receives wind-up notifications as at the end of the financial year so the June quarters have significantly larger wind-ups than other quarters. However, a large number of wind-ups occurred in the September 2017 quarter due to the ATO’s cancellation of ABNs for around 9,000 SMSFs.”

The rate of SMSF growth is slowing, but there still has been an increase in the total number of SMSFs. The ATO has 597,009 SMSFs as at 31 December 2018, with 1,127,304 members – though the member figure is extrapolated from 2016/17 data by the ATO. SMSFs are estimated to hold almost $696.5 billion in net assets.

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