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What are the rules around off market transfer of ASX listed shares from an individual into SMSF?
I understand that capital gains tax applies, and the price needs to be as listed on the date of transfer.
What dates can be used to determine the price for transfer?
A: Yes, it will be a CGT event, and is also a contribution to super (subject to the non-concessional cap).
Graeme Colley, Executive Manager, SMSF Technical & Private Wealth at Super Concepts, has provided the following further information:
“Where a member makes a transfer of listed shares to their SMSF section 66 of the SIS Act applies. Section 66 prohibits certain assets from being transferred to the fund but there are exceptions such as shares and other investments that are listed on an approved stock exchange. The legislation requires that the transfer of these investments is made at its market value.
The market value of an investment can be determined for tax purposes in line with the ATO’s valuation of assets for taxation purposes which can be found at:
As an example of the valuation of listed shares, the ATO says:
we will accept a valuation based on the closing price of widely held shares listed on the Australian Securities Exchange (ASX) to derive the market value for a non-arm’s length transfer of such shares between a husband and wife, provided the price had not fluctuated materially on the day.
Here is the link to that statement:
When it comes to superannuation contributions that are made as a transfer of listed shares, the ATO has published TR 2010/1 which is when they consider a contribution has been made by the fund. In the case of listed shares that are transferred to the fund the contribution is considered to be made when the transfer document have been executed by both parties, in this case the member and the fund trustee. Refer to paragraphs 18 to 25 of Tax Ruling 2010/1. Here is the link:
https://www.ato.gov.au/law/view/document?DocID=TXR/TR20101/NAT/ATO/00001
It would appear that for taxation purposes that the market value of a listed share that is to be transferred to a superannuation fund is the closing price of the share on the day the transfer takes place. However, in some situations the market value of the share may be agreed prior to the execution of the transfer documents and the parties use the closing price of the share on the day the agreement is made. It would be reasonable to expect that any transfer documents would be executed as soon as possible after the agreement has been made, especially in the case of an SMSF where the member is transferring the shares to the fund and they are also the trustee of the fund or a director of the corporate trustee.”
