Strategic Wealth Moves: Understanding In Specie Transfers

Superannuation remains Australia’s most effective structure for building long-term wealth and generating passive, tax-efficient income in retirement. For individuals with a self-managed super fund (SMSF), in specie transfers offer a strategic way to move existing investments into this concessionally taxed environment without selling them.

What is an in specie transfer?

An in specie transfer occurs when you contribute an investment directly into your SMSF rather than contributing cash. The ownership shifts from you personally to the fund, but the investment itself remains unchanged. You continue holding the same asset. It simply sits in a more tax-effective structure.

If treated as a contribution, the transfer is counted either as a concessional (tax-deductible) contribution or a non-concessional (after-tax) contribution, depending on your circumstances. Another option is for the SMSF to acquire the asset from you as a purchase rather than as a contribution, provided the fund has enough cash available.

Because ownership changes, capital gains tax may apply at the time of transfer. Once the asset is inside the SMSF, however, future earnings are generally taxed at up to 15% and may become entirely tax-free once a retirement-phase pension begins.

What assets can be transferred?

Superannuation legislation is strict about the types of assets an SMSF can acquire from a member. The main permissible assets are:

• ASX listed investments
  • Units in widely held managed funds
  • Business real property (land and buildings used wholly and exclusively for business purposes)

Residential property and most personal use assets (e.g. collectables) are not eligible for in specie transfer.

Managing contribution caps and timing

Because contribution caps apply, assets often need to be transferred progressively over time. This is why early planning in the lead up to retirement is important.

Often, this involves:
• Spreading transfers across multiple financial years
• Prioritising high growth assets with strong future potential where transferring now will not create a significant current tax bill

How in specie transfers add value

When used strategically, in specie transfers can add meaningful value to long term wealth planning. Key benefits include:

• Moving assets into a concessional tax structure. Many individuals build portfolios outside super for flexibility and access to capital. As retirement approaches, gradually moving suitable assets into super improves long-term tax efficiency and increases the capital held in the most effective structure for passive income in retirement.
• Avoiding time out of the market. Transferring the asset directly avoids selling, repurchasing and sitting in cash. Your market exposure remains uninterrupted while compounding in a lower tax environment.
• Flexibility in timing. You can choose when to transfer assets to optimise your tax position, including using available capital losses to reduce the impact of gains that may arise when completing the transfer.

At Hewison Private Wealth we view all investment structures as part of one connected strategy. In specie transfers are one of the ways we help clients place assets in the right structure at the right time so that their long-term goals remain supported.

Professional advice is essential

In specie transfers must be completed correctly to remain compliant. Contribution caps, tax implications, eligible asset rules and the correct transfer method all need to be carefully managed.

Working with a financial adviser and an accountant helps ensure the process is accurate, aligned with your broader wealth strategy and achieves the intended tax outcomes. When done appropriately, in specie transfers provide an effective way to move wealth into the superannuation system and strengthen your long-term financial position.