Upcoming changes to SMSF rules you need to be aware of!

Peter Cramer

I thought it might be a good time to let you know that there are a couple of changes that will apply to the transfer of assets from yourself to your SMSF effective from 1 July 2013.

From 1 July 2013 you can no longer transfer Listed Shares into a SMSF by way of an Off Market Transfer.

Shares must be moved by way of an ‘official market’ which means buying and selling via the Stock Exchange with the corresponding brokerage and fees.

So for example, say you want to transfer your 400 BHP shares from your own name to your SMSF. After 1 July 2013 one option would be to sell the 400 shares, wait for the money to arrive in your bank account (approx 5 days), withdraw the money, deposit it to your SMSF, wait a day or two, and then purchase 400 BHP shares in the name of your SMSF. But that is probably a delay of 6 or 7 days between transactions – what a nuisance if the price has risen a lot over that time! Plus the fees to sell and buy!

Another option is to ‘cross’ the sale with a Broker (currently illegal but the Law will be changed to allow it!) – however this will be somewhat involved and might be costly.

So… Consider attending to any share transfer to your SMSF before 30 June 2013 to beat the rule changes.

As always be very careful to understand the CGT impact of the disposal of the shares and make sure you don’t exceed your contribution cap limits! Definitely a good idea to speak to us at Green Taylor Partners before you undertake any asset transfers just to be sure.

The other issue in relation to transfers to your SMSF relates to land transfers (remember – only Business Real Property can be transferred from you to your SMSF – not residential property).

From 1 July 2013 you will need an independent Valuation of the property from an official prescribed “valuer”. The detail is still to come, but it is almost certainly going to involve a cost higher than what the case is currently.

Again, you may wish to consider moving appropriate business land and buildings to your SMSF before 1 July 2013. (Again, watch the CGT and your contribution limits.)

Irrespective of the changes, there are wonderful opportunities in relation to moving assets into your SMSF and potentially significantly enhanced retirement benefits and tax reductions!

But, as always, before you start transferring any assets please check with us at Green Taylor Partners – there is much to consider in order to get this ‘right’.

One final comment

There will be a lot of uninformed media talk about Super and SMSF’s in the next 6 months – most of it hype! (I have already read a lot of this in the past month or so!) But I promise you this – SMSF’s will remain the predominant retirement, wealth creation and (legal) tax minimisation vehicle for many, many years to come!

**Keep an eye and ear out for our SMSF Information & Strategy Sessions over the coming months – we have lots to tell you about!

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