“Then the June quarter numbers come around and you see this big hit and a lot of that's a common sense scenario to wind up a fund as at 30 June because trustees have to lodge a final tax return. It’s also this time of year people are thinking about whether an SMSF is still right for them.”

Miller said that as 30 June approaches, advisers and trustees are already looking at strategies such as contributions, future pensions, and doing a cost analysis of their fund and may no longer have the desire to maintain an SMSF.

“If you make the decision to wind up a fund at the end of May or early June then you’re probably not going to be looking at the end of the current financial year to wind up.”

“From a process point of view, it would have to be at the end of the following financial year.”

He continued that for the historical style of SMSF, it is often rolled into “the old cash environment”, and the fund can be wound up quickly, especially if it has individual trustees.

“They can roll their money out or pay their benefit out of that based on a condition of release.”

“But the reality of a fund that invests through a well-considered investment strategy, whether it’s listed securities, managed funds, property and other assets, the more difficult those assets become to unwind. The more illiquid the asset, the harder it is to sell, or more importantly, the harder it is to sell for what you want to sell it for.”

If it is a corporate trustee structure, there are a number of other steps to be considered before winding up, such as whether the last payout is made to another super fund or the members as part of the process.

Aaron Dunn, chief executive of Smarter SMSF, added that there are several factors trustees need to consider when winding up a fund, including whether a member is in retirement phase and over 65.

“If they are over 65, there is a pathway that would allow for that wind up to occur in a much simpler way than maybe for someone that is in their 30s or 40s and has decided that an SMSF is not for them,” Dunn said.

“There are layers of considerations in that process that not only contemplate the investment strategy and the need to dilute down, and in a lot of instances, you're not going to be able to do an in-specie transfer of assets across into the different product.

“You need to understand the dynamics that make up the membership and the trusteeship to ensure that you can optimise the outcome for the client, but also allow advisers to set some expectations about how long that would play out as well.”