Can I Transfer the Listed Shares in My Name to My SMSF?

Picture of toppled coin glass jar with coins spilling out

Yes, you can transfer listed shares in your name to your SMSF with the assistance of SMSF accountants. The proposed ban on off-market share transfers to SMSFs was never legislated, so this green light still exists.

With the guidance of SMSF accountants, 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). Additionally, if you’re already taking a pension, the earnings will be tax-free, and the imputation credits will be refundable to the fund.

How do I do this?

  • Determine the transfer price per share – this should be at the 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 transfer shares to your SMSF, your investment strategy should be reviewed simultaneously.

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 guides you through difficult times.

An investment strategy can remind trustees of their long-term investment objectives and prevent them 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.
  • The 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 – Kreston Stanley Williamson has produced this article to serve 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 in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.

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