In Specie Transfer Property Out Of SMSF Stamp Duty To Member (NSW)

Self-managed super funds (SMSF) are a way to save for your retirement. They differ from other types of retirement funds in that the members of the fund are typically also the trustees of the fund. This means that you run your SMSF fund for your own benefit, and it is your responsibility to manage the fund in compliance with superannuation and taxation laws. The sole purpose of a SMSF must be to provide retirement benefits for the members. All of the trustee’s decisions must be in the best financial interests of the members, including an “in specie transfers”.

In Specie Transfer Property Out Of SMSF Stamp Duty 

If you have a SMSF, you need to be aware of how you can legally transfer assets (such as shares or property) in or out of the fund. In specie transfers (meaning “in the actual form”) are off-market transfers of non-monetary assets without the need to convert them into cash. This form of transaction is more commonly used with SMSFs than public superannuation funds.

Strict rules apply to this type of transfer. The only types of asset that may be transferred in specie under superannuation law are shares and listed securities, managed funds and business real property. In addition, in specie asset transfers must be conducted at current market value. You also generally cannot intentionally acquire assets (such as in specie contributions) from anyone who is related or close to a member of the fund.

Duty Concessions

There can be tax benefits involved in transferring personally owned property into your self-managed superannuation fund. An accountant can assist you in determining whether this is the most tax-effective strategy for you and your SMSF.

You can also take advantage of the valuable stamp duty concession that applies to these transfers. While the transfer of an average Sydney house attracts a duty of approximately $46,000, an eligible property transfer into a SMSF costs only $500.

In NSW, you can also transfer property in specie from one SMSF to another at this concessional stamp duty rate as long as you meet the requirements of the Duties Act. This is sometimes the best approach if the SMSF lacks the liquid assets to roll out a member’s benefits as cash only. This would mean that the SMSF does not have to liquidate assets to have enough cash for a rollover. However, the trust deed of the SMSF must contain the powers to transfer SMSF property in specie, and the current market value of the property must not exceed the member’s total value benefits.

We can help you prepare concessional stamp duty documents and lodge documents for stamping with the Duties Office and Titles Office. If you need any assistance, contact one of our lawyers at [email protected] or call 02 9150 6991 for expert legal advice.