Masterclass SMSF – In-specie Transfers – traps to avoid in Self-Managed Super

In-specie Transfers – Traps to Avoid in Self-Managed Super

In-specie Transfers – Traps to Avoid in Self-Managed Super

In-specie refers to non-cash and there are certain restrictions when transferring assets that are non-cash into Self-Managed Super Funds (SMSFs). Generally a super fund cannot acquire assets from related parties, whether purchased or contributed in-specie. This includes residential or investment property, life insurance policies, units in widely-held trusts, bank notes, coins and collectables. But the exceptions are business property and listed securities (shares).

Example – Bob is a member of his SMSF and wants to transfer his factory worth $600,000 to his SMSF. As there is a $150,000 limit on personal (concessional) contributions, (which he can use the Brought-Forward rule of 3 years, a total of $450,000) there is still another $150,000 over the contribution limit (cap). He would need to consider other options such as splitting the contribution with his wife, or having the fund purchase the factory out-right, or with a limited-recourse borrowing arrangement if there are not enough funds, or transferring part of the ownership and continuing to own the remainder as tenants – in-common. Recent legislation has proposed a ban on off-market/in-specie transfers, but this is deferred to 1 July 2013, yet to become legislation. The reason behind this is to stop transfers below market value. The difference in value will be deemed a contribution. It is advised to seek advice to ensure breach of caps and regulations are avoided.


About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
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