Can I transfer listed shares in my name to my SMSF?

Can I transfer listed shares in my name to my SMSF?

Yes you can – the proposed ban on off market share transfers to SMSFs was never legislated, so this green light still exists.

The advantage of having your SMSF own the shares is the flat tax rate of 15% on the dividends and capital growth (10% if held longer than 12 months) and if you’re already taking a pension, then the earnings will be tax-free and the imputation credits refundable to the fund.

How do I do this?

  • Determine the transfer price per share – this should be at current market value.
  • Complete an Off Market Share Transfer Form and lodge it with the share registry.
  • Declare the capital gain/loss on the transfer in your personal tax return.

Be mindful of your concessional and non-concessional contribution caps, as the total value of the off market share transfer will need to be declared as a contribution in your SMSF’s annual accounts in the year of transfer.

If you are transferring shares to your SMSF, a review of your investment strategy should also be done at the same time.

Investment strategies

With the turbulence of the past few weeks in both the domestic and global financial markets, having a written investment strategy for your SMSF is a timely reminder of what your investment goals are and guide you through the difficult times.

Not only can an investment strategy remind trustees what their long term investment objectives are, but it also prevents trustees from making irrational decisions.

So what should an investment strategy cover?

  • Diversification in the range of assets and asset classes.
  • Liquidity of the fund’s assets to meet fund expenses.
  • Ability of the fund to pay benefits (e.g. retirement, death of a member).
  • The members’ needs and circumstances (e.g. age of members and time to retirement; insurance cover).

Remember, it is a legal requirement for SMSF trustees to have a written investment strategy so if it’s still in your head, time to put it on paper.

*Correct as of October 2015

*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this article, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under professional standards legislation.

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