An asset transfer is the process of transferring something of value (such as managed investments or listed securities) from one person or place to another. When moving an investment or asset between different structures of ownership, such as a personal capacity to a trust, the asset or investment can either be sold down to cash with the proceeds transferred between parties, or the transfer can be made in-specie, commonly referred to as an in-specie transfer.

Understanding In-Specie Transfers

An in-specie transfer is the process of transferring assets without selling the underlying investment, often used in transferring managed funds or shares. In-specie is a Latin phrase meaning in its actual form, so a transfer in-specie is a transfer of an asset in its present form.

There are a number of benefits of carrying out an in specie transfer include:

  • potential savings on buy and sell costs;
  • preventing risks associated with selling and repurchasing investments in the market;
  • being able to remain invested in the market throughout the transfer; and
  • potential savings on capital gains tax (CGT) provided there is no change in beneficial ownership.

Superannuation and In-Specie Transfers

There are special rules in relation to the in-specie movement of assets in the context of superannuation. For taxation purposes, a trustee cannot acquire an asset from a related party, with few exceptions including listed securities, business real property, units in widely held unit trusts, and in-house assets within the prescribed limits. While the asset is not sold down to cash, an in-specie transfer will generally trigger a capital gains tax event, as the ownership is being transferred.

The only assets currently allowed to be transferred to a self-managed superfund (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.

Conclusion

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. LegalVision has a team of great lawyers with experience in in-specie transfers and SMSFs who can assist you with your company’s asset transfer. Please call our office on 1300 544 755 and our Client Care team will happily provide you with an obligation-free consultation and a fixed-fee quote.

Lachlan McKnight

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