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Hewison Insights

Off-Market transfers for SMSFs still alive

Glenn Fairbairn
Director/Private Client Adviser
13 Jan 2013

In July last year my colleague Nathan Lear wrote a blog regarding the ATO’s intention to ban off-market asset transfers between SMSFs and related parties, where an underlying market existed. This effectively spelt the end of SMSF trustees being able to transfer personally held listed shares into their SMSF.

Under this proposed change to legislation, trustees who intended to transfer personally held shares to their SMSF would be required to sell the shares on the market, contribute the cash to their SMSF and then buy the shares back via their SMSF. Given shares take several days to clear, this could put trustees in a position where they are out of the market for several days and may be subject to adverse share price movements. 

Aside from the market risk discussed above, our other concern regarding this proposed change was that the restrictions on off-market asset transfers would only apply to SMSFs. Institutions and industry superannuation funds that commonly use this strategy would continue to be exempt.  In our view this was an unfair disadvantage for SMSFs.

Last week the Government finally released their draft legislation regarding this issue. The good news is that the new proposed legislation does not prohibit the acquisition or disposal of listed securities between an SMSF and its related parties, however the mechanism for the transfer of assets has referred to further regulations…which are yet to be released. For the time being, let’s quietly celebrate a minor victory, but hold the raucous applause until further detail is provided.

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.