Currently, you can currently transfer the ownership of some types of property directly into your Self-Managed Superannuation Fund (SMSF). This is known as an ‘off-market transfer’ and ‘in specie contribution’, and the value of the property transferred will be counted as a contribution into your SMSF. No actual cash payments will need to be made. They are:
- Business real property you used exclusively in running your business, for example a warehouse you conduct your business from;
- Shares in companies listed on the stock exchange;
- In-house assets, for example an investment in a related party – provided that the market value of the in-house assets will not exceed 5 per cent of the total market value of assets held by the fund; and
- Investments in managed funds provided that the managed fund held is a unit trust.
The Government believes that ‘off-market transfers’ are open to abuse by manipulation of the asset value and/or transaction dates, and has committed to the implementation of new rules to apply from 1 July 2012. They include new rules are:
- To transfer listed securities and investments, you will have to sell the investments on the open market and then re-purchase these securities or equivalent securities. This means you will incur brokerage fees on the initial sale and on the re-purchase; and
- To transfer business real property or unlisted shares you will have to have the property valued by a qualified independent valuer rather than your local real estate agent. Such valuations are usually significantly more expensive.
Transferring property into a SMSF