I have some shares that I wish to transfer into my SMSF. I am a full time PAYG Employee with some ABN Income. If I wish to make an in-specie contribution into my SMSF shall this be a concessional or a non concessional contribution?
Would you recommend I do this as a contribution or as a sale?
A: Thanks for the questions.
I will answer them both together;
- If your trust deed allows you can make an in-specie contribution
- Contributions under age 65 are allowed without restriction
- When the shares are transferred it is deemed to be a sale and subject to CGT – if the shares are personally owned then it will be 50% of the sale price less their cost less any costs of acquisition and sale. The net gain is added to your income for tax purposes and then taxed at your marginal rate
- The contribution amount is based on the market value of the shares on the transfer date (you should use the closing price)
- The ownership of the shares is effected either via a broker (if you purchased the shares via a broker) or via the share register (if they’re issuer sponsored). Both will charge a fee to change the ownership
- The deemed contribution is a concessional contribution if you claim those contributions as a tax deduction but given you’re an employee this is probably not allowed – but I do not have sufficient detail to know for sure. If a tax deduction is not claimed as a tax deduction then they will be a non-concessional contribution
- As there is penalties for exceeding both the concessional and non-concessional contribution caps. You should be careful about this point.
