In-Specie Transfers

"in-specie transfers can potentially be a integral part of a funds accumulation strategy."

The information listed below is a summary and is intended to be of a general nature only. It does not take into account your individual circumstances or the specifics of your existing superannuation fund.

The below information is not intended to be comprehensive and we recommend that you seek professional advice that will take into account and address your personal circumstances.

Generally, trustees of SMSFs are prohibited from acquiring assets from related parties – such as fund members, their family, and partners, related companies and trusts. However, there are some exceptions.

Therefore, if you’re a member of a SMSF you should not contribute your own assets or assets of your associates unless the asset is:

We are in the business of forming long lasting relationships, with our clients.

  • business real property (used exclusively for the running of a business), for example a warehouse or office that you conduct your business from
  • a listed security (such as shares in companies listed on the stock exchange)
  • an in-house asset, for example an investment in a related party. The market value of in-house assets cannot exceed 5% of the total market value of assets held by the fund.You can also generally contribute an investment in a managed fund, provided it is a widely held unit trust

If the managed fund is a normal public offer fund with a range of investors it should meet the definition. Smaller vehicles such as some property syndicates or unlisted trusts may not.

Each of the assets must be acquired by the SMSF at market value.

You cannot transfer a residential investment property to your SMSF. It is not covered by the above exceptions.

The transfer of an asset ‘in-specie’ is a CGT event as the transfer is a disposal. You may make a capital gain or loss from the CGT event according to the usual CGT provisions that apply to that asset.

If you make an ‘in-specie’ transfer, CGT may still be payable as you may be taken to have received the market value of the asset at the time of the CGT event.

Depending on the situation, a market valuation may be undertaken by either a qualified valuer or a person without formal qualifications. In any case, the person who conducts the valuation must base their valuation on reasonably objective and supportable data.

Use of a qualified valuer should be considered where the value of the asset represents a significant proportion of the fund’s value or where the nature of the asset indicates that the valuation is likely to be complex or difficult.