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Questions & Answers - Off Markets


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+ Can I transfer assets I own in my own name to my SMSF?

An SMSF Member (or an associate of a Member including family members by blood or marriage or entities controlled by the Member) cannot transfer an asset they currently own to a SMSF unless the transfer is specifically allowed by legislation. The only assets currently allowed to be transferred to an SMSF from a Member (or an associate of a Member including family members by blood or marriage or entities controlled by the Member) are as follows:

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    ASX Listed Securities
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    Widely Held Managed Funds
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    Business or Commercial Property
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    Cash Based investments such as Bonds and Debentures

Importantly, whilst a SMSF can purchase Residential Property from a person who is not a Member (or an associate of a Member including family members by blood or marriage or entities controlled by the Member), a SMSF cannot purchase Residential Property from a Member (or an associate of a Member including family members by blood or marriage or entities controlled by the Member) even if the purchase is at market value. This is illegal!

+ How do I transfer ASX Listed Securities I own to my SMSF?
 
 
How to Transfer Shares from your Individual Name to your SMSF

You can transfer ASX Listed Shares held in your personal name to your SMSF by completing an Off Market Transfer Form (see below). For example if you own 500 BHP shares in your personal name and you wish to transfer these shares to your SMSF, you will need to complete an Off Market Transfer Form (OMT) and lodge this form with CommSec or EBROKING. In the Off Market Transfer Form you will need to list the Purchaser of the Shares as your SMSF. You will not need to specifically state which Member the shares are being allocated to. This is done as part of the annual Checklist Process.

 
 
CommSec Off Market Transfer Fee

A standard fee of $54 per Off Market Transfer applies with CommSec. For example if you wish to transfer say BHP, CBA and ANZ from your personal name to your SMSF this will count as 3 Off Market Transfers.

 
 
EBROKING Off Market Transfer Fee

A standard fee of $55 per Off Market Transfer applies with EBROKING. For example if you wish to transfer say BHP, CBA and ANZ from your personal name to your SMSF this will count as 3 Off Market Transfers.

 
 
CommSec Off Market Transfer Form

A CommSec Off Market Transfer Form can be found here.

 
 
EBROKING Off Market Transfer Form

An EBROKING Off Market Transfer Form can be found here.

 
 
Important Information

The tax implications of transferring shares via an Off Market Transfer must be carefully considered prior to undertaking this strategy and are detailed here.

+ How do I transfer Managed Funds I own to my SMSF?

To transfer Managed Funds (e.g. MLC, AMP, Platinum etc.) from your personal name to the name of the SMSF an Off Market Transfer Form must be completed and lodged with the Fund Manager directly. A generic Off Market Transfer Form can be found here. In the Off Market Transfer Form you will need to list the Purchaser of the Managed Funds as your SMSF. You will not need to specifically state which Member the Managed Funds are being allocated to. This is done as part of the annual Checklist Process detailed here.

+ How do I transfer Commercial Property I own to my SMSF?

To transfer Commercial Property from your personal name to the name of the SMSF you will need to execute a Contract of Sale and will need a solicitor to prepare the required documentation including lodging the transfer documents with the relevant State Revenue Office. You will need to list the Purchaser of the Commercial Property as your SMSF. You will not need to specifically state which Member the Commercial Property is being allocated to. This is done as part of the annual Checklist Process.

+ How do I transfer Residential Property I own to my SMSF?

You must remember that it is illegal to transfer Residential Property from the name of an SMSF Member (or an associate of a Member including family members by blood or marriage or entities controlled by the Member). So you should never contemplate this transfer as it will lead to significant penalties.

+ Do the transfers have to be at Market Value?

Yes. All Asset Transfers from a Member (or associate of a Member) must be transferred at Market Value. The Market Value must be clearly detailed in the Off Market Transfer Form prepared for the transfer of ASX Listed Securities or Managed Funds or in the event of Commercial Property in the Transfer Documentation. To the extent that the asset is transferred to the SMSF at a value under Market Value the transfer will be "deemed" to be at Market Value.

+ How is the Off Market Transfer accounted for in my SMSF?

When you make an Off Market Transfer to a SMSF, it can be treated in one of two ways when it is received by the SMSF. It can be treated as either a Contribution or alternatively as an Asset Purchase by the SMSF. It is totally your choice which option is chosen! Each is discussed below.

 
 
Treating the Transfer as a Contribution?

In the documentation to action the asset transfer you will need to list the Purchaser of the asset as your SMSF. At the end of the Financial Year we will forward to you a Checklist detailing if you wish the transfer to be treated as a Contribution or an asset sale. If you elect the transfer to be treated as a Contribution you will need to elect which Member will be allocated the contribution and the type of the contribution to be allocated, namely Non Concessional or Concessional. Once this election has been made, the value of the asset (not the asset itself) will be allocated to the Member when preparing the annual compliance documents for the SMSF.

 
 
Treating the Transfer as an Asset Sale

As detailed above in the documentation to effect the asset transfer you will need to list the purchaser of the asset as your SMSF. At the time of the transfer you can elect that the transfer be treated as a sale and the SMSF pay you the Market Value of the asset being transferred. In this case we will not record the asset transfer as a contribution. Under this scenario the value of the asset (not the asset itself) will be allocated on a proportional basis to each Member based on that Members existing ownership of the SMSF at the time of the transfer, when preparing the annual compliance documents for the SMSF.

+ Is Stamp Duty payable on the transfer of an asset from my name to a SMSF?

Stamp Duty may be payable on Managed Funds and Commercial Property Transfers and should be carefully considered prior to transferring these assets to your SMSF. Accordingly you will need to contact the State Revenue Office or your solicitor to discuss the Stamp Duty implications of any transfer strategy where it involves Managed Funds or Commercial Property. There is no stamp duty on share transfers.

+ Is Capital Gains Tax payable on the transfer of an asset from my name to a SMSF?

Because there is a change in ownership of the asset transferred from you to the SMSF, the asset transferred is deemed to have been sold resulting in possible CGT implications on the transfer. This means:

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    If the asset has been held for less than 12 months, any capital gain on the asset transferred will be realized and the full amount of the capital gain will be included in your personal taxable income (not the SMSF Taxable Income).
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    If the asset has been held for more than 12 months, any capital gain on the asset transferred will be realized and 50% of the capital gain will be included in your personal taxable income (not the SMSF Taxable Income).
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    Any capital loss on the asset transferred will be realized and will be included in your personal taxable income (not the SMSF Taxable Income).