From 1 July 2013 Self Managed Super Fund (SMSF) trustees will no longer be able to transfer listed shares into super via an off-market transfer arrangement.

The transferring of shares into the superannuation environment is called an in specie transfer. This type of transfer allows trustees the ability to transfer shares into superannuation without the need to sell and rebuy. As a result an in specie transfer, depending on the value of holdings, can save a considerable amount of brokerage. For example, some online brokers allow you to transfer shares off-market currently for $50, whereas brokerage can be around 0.15%.

In 2010, the Cooper Review recommended the ban of off market transfers into superannuation where a market already exists. Unfortunately the ban is not entirely clear and is yet to be passed through parliament. However, experts suggest assuming the ban will become law and to act now before it’s too late.

transfer shares into superA few factors that need to be considers before transferring shares into your self managed super fund include:

  • Capital gains – the transferring of shares into an SMSF acts as a change of ownership and therefore you may be liable for capital gains tax. No stamp duty is payable on listed shares.
  • Contribution caps – pre-tax (concessional) contributions are capped at $25,000 per year and after-tax (non-concessional) contributions have a limited of $150,000 per year or $450,000 over a rolling three year period.

Advice should be sort where possible before undergoing this strategy. But don’t wait too long as registry office may receive a huge demand for off-market / in specie transfers in June and it is unknown what treatment will occur to those that are not completed by 30 June 2013.

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Thomas Jacks BCom (Acc), SMSF SpecialistTM, Adv. Dip F.S. (FP)
“I want to be able to assist clients with their investment and retirement planning by providing real strategy advice. It’s my aim to not only help my clients but to educate them by addressing the entire picture” Google Plus

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