Transferring shares to my SMSF

I want to transfer shares from my personal account into my SMSF as part of my 150k non-concessional contributions for this tax year. (a) Should I wait until after Swannie’s budget to do so, and (b) are there any restrictions I should be aware of? My SMSF is worth about 600k at present and I’d like to transfer about 100-120k worth of shares.

A: I don’t think there is any risk of Mr Swan touching the $150,000 cap on non-concessional contributions in the Budget – so in that sense, there is no need to rush it.


That said, there are 2 other important considerations:


1. The transfer will be considered to be a ‘disposal’ for capital gains tax purposes. So, depending on the cost price of the shares and other capital gains/losses incurred, you (personally) may be liable to pay capital gains tax. Timing to optimise the tax impact may be important; and


2. Under “already announced” changes, off market transfers are going to be a lot harder to execute from 1 July 2013. The ATO has announced that it proposes to change the rules relating to ‘related party transactions’. From 1 July 2013, a transfer of shares between the SMSF and a related party will need to be conducted through the underlying market (ie the ASX), which will mean going to a broker and asking him to arrange a purchase and a sale transaction at the market price. This may mean extra transaction costs – and will certainly remove any flexibility in relation to optimising the transfer (disposal) price.


So, while there is no immediate urgency to make the contribution, I would certainly be arranging it well before the end of the financial year.



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