SMSFs can make a concessional transfer of property

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If the self-managed super fund (SMSF) is short on cash to roll over a member’s benefits it is possible for a member to transfer a property ‘in specie’ to another SMSF.

In NSW, transfers of property from one SMSF to another SMSF can be transferred with only concessional stamp duty of $500 payable if the relevant requirements of the Duties Act are met.

This method of transfer may be suitable where the SMSF does not have enough liquid assets to roll out a member’s benefits by way of cash only.

A combination of a transfer of property to the relevant member’s new SMSF with the remainder of the rollover to occur by cash is also possible.  This would mean that the SMSF would not have to liquidate its assets in order to have sufficient cash available for a rollover.

Some important things to consider prior to effecting a transfer include:

  • Ensuring the relevant trust deed of the SMSF contains powers to transfer property owned by the SMSF ‘in specie’
  • Whether the property meets the definition of “business real property” if the transfer is occurring from a SMSF who is considered a related party to the receiving SMSF
  • The current market value of the property to be transferred cannot exceed the total value of the member’s benefits to be transferred out of the SMSF

Our firm can assist with the preparation of concessional stamp duty documents as well as attending to the lodgement of documents for stamping with the Duties Office and registration with the Titles Office.

Prior to proceeding with a transfer it is important that a member seek advice from their financial adviser and accountant as to whether such a transfer would be suitable.
Similar concessions or exemptions are available in other states, for example, Vic and WA.

By Natasha Ng, Solicitor

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