Reading time: 4 minutes

An asset transfer is a process of transferring something of value (such as managed investments or listed securities) from one person or place to another. You may be considering moving an investment or asset between different structures of ownership. For example, you can move certain assets from a personal capacity into a trust. In this process, the asset or investment can be sold down to cash, with the proceeds transferred between parties. Alternatively, the transfer can be made in-specie. This article explains what an in-specie transfer is and its benefits. 

Understanding In-Specie Transfers

An in-specie transfer is the process of transferring assets without selling the underlying investment. This process is often used in transferring managed funds or shares. ‘In-specie’ is a Latin phrase meaning ‘in its actual form.’ Therefore, a transfer made ‘in-specie’ is a transfer of an asset in its present form. Unlike the process of selling an asset and then transferring the cash between parties, an in-specie transfer involves the transfer of an asset without any money changing hands.

Benefits of an In-Specie Transfer

There are several benefits of carrying out an in-specie transfer, including:

  • potential savings on buy and sell costs, for example, avoiding the fees associated with the involvement of listing an asset or engaging an agent; 
  • preventing risks related to selling and repurchasing investments in the market, for example, performing an in-specie transfer of shares prevents them from being sold at a low point in market fluctuations;
  • being able to remain invested in the market throughout the transfer; and
  • potential savings on capital gains tax (CGT) if there is no change in beneficial ownership.

Superannuation and In-Specie Transfers

You can also make in-specie transfers to your superannuation fund. This transfer is in addition to the conventional contributions that you make to your superannuation. In-specie transfers into your superannuation fund involve the transfer of an asset into your fund without it first being liquidated into cash. Whilst it is possible to make this kind of transfer to retail and industry super funds, it is more commonly relevant to self managed super funds (SMSFs). For example, an SMSF member in a high marginal tax bracket may consider undertaking an in-specie transfer to shift an asset into a superannuation fund for, among other reasons, favourable tax treatment. 

There are special rules concerning the in-specie movement of assets in the context of superannuation. For taxation purposes, a trustee cannot acquire an asset from a related party. There are a few exceptions, including:

  • listed securities; 
  • business real property; 
  • units in widely held unit trusts; and 
  • in-house assets within the prescribed limits. 

While you do not sell the asset down to cash, an in-specie transfer will generally trigger a capital gains tax event, as you transfer the ownership.

Transferring an Asset Into an SMSF

Currently, the only assets you can transfer into a SMSF from a member are as follows:

  • ASX listed securities;
  • widely held managed funds;
  • business or commercial property; and
  • cash-based investments, such as bonds and debentures.

When making an in-specie transfer to a SMSF, different processes may be required. This will depend on the type of asset in question, for instance:

  • when transferring an ASX listed security, you must lodge an Off Market Transfer Form; or.
  • when transferring a commercial property, you must execute a contract for sale. 

Transferring an asset to your SMSF can result in possible tax efficiencies and CGT savings. However, it is essential to understand that once you transfer an asset to an SMSF, you cannot withdraw the asset until you reach retirement age. With this in mind, it is crucial to be sure that you will not need to access your assets before proceeding with an in-specie transfer.

As well as this, transferring real property often attracts sizeable stamp duty. Accordingly, it is crucial to think carefully before deciding to transfer any assets to your SMSF.

Transferring an Asset Out of a SMSF

You can move your assets out of your SMSF through an in-specie transfer once you reach retirement age. Alternatively, you can make an in-specie transfer if you have met other superannuation conditions of release. As above, you must facilitate the transfer of an ASX listed security through an Off Market Transfer Form; you must execute the transfer of commercial property through a contract for sale.

Key Takeaways

An asset transfer will depend on third parties such as share registries, broking institutions, fund managers and government departments such as the Office of State Revenue. If you require assistance with your company’s asset transfer, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page. 

Webinars

Everything You Need to Know about SaaS Agreements

Thursday 7 April | 11:00 - 11:45am

Online
Understand which contracts will protect your SaaS contract from risk, and how. Register for free today.
Register Now

What to Consider When Buying a Tech or Online Business

Wednesday 13 April | 11:00 - 11:45am

Online
Learn how to get the best deal when buying a tech or online business. Register for our free webinar today.
Register Now

Corporate Governance 101: Responsibilities for New Directors

Wednesday 27 April | 11:00 - 11:45am

Online
If you are a new company director, join our free webinar to understand your legal compliance obligations. Register today.
Register Now

Rogue Directors and Business Divorces: How to Remove a Director

Thursday 28 April | 11:00 - 11:45am

Online
Removing a board director is not simple. Join our free webinar to learn how to handle rogue directors. Register today.
Register Now

Employment Essentials for Tech Businesses

Thursday 5 May | 11:00 - 11:45am

Online
Protect your tech business and your employees by understanding your employment legal obligations. Register for our free webinar today.
Register Now

How to Protect and Enforce Your Trade Mark

Wednesday 11 May | 11:00 - 11:45am

Online
Protect your business’ brand from copycats and competitors. Register for this free webinar to learn how.
Register Now

How Franchisors Can Avoid Misleading and Deceptive Conduct

Wednesday 18 May | 11:00 - 11:45am

Online
Ensure your franchise is not accused of misleading and deceptive conduct. Register for our free webinar today.
Register Now

How to Expand Your Business Into a Franchise

Thursday 26 May | 11:00 - 11:45am

Online
Drive rapid growth in your business by turning it into a franchise. To learn how, join our free webinar. Register today.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards
  • 2019 Most Innovative Firm - Australasian Lawyer