Most contributions to a SMSF are made in cash, but did you know you can also contribute certain assets to your fund too? These types of contributions are called “in-specie” contributions and may be a good alternative to consider if you don’t have available cash on hand and want to make a contribution to super.
While most superannuation funds can accept in-specie contributions, they occur more commonly with SMSFs than with industry or retail superannuation funds. But only certain assets listed in the super laws can be transferred to an SMSF from a member of the fund. Most in-specie contributions are made using:
Regardless of whether the contribution is made via cash or in-specie, in many respects they are treated in much the same way – for example:
Making a contribution of assets rather than cash can benefit SMSF members as it allows them to increase the value of their retirement
savings by transferring the aforementioned assets they already own into superannuation without the need to sell the asset first.
Where that asset is a property, such as business real property, it can then potentially be leased back to a related party of the fund to use in a business.
As mentioned above, SMSFs can only accept certain types of assets, such as listed shares or business real property, as an in-specie
contribution from a member. This rule therefore limits the types of assets that can be transferred to your fund. For example, a residential
property you own personally cannot be transferred to your SMSF.
Further, because there is a change in ownership of the asset transferred from the member to the SMSF, the transfer is deemed to be a disposal for the member and any gain realised may be subject to capital gains tax.
The SMSF may also incur stamp duty and transaction costs when the asset is transferred to the fund.
Assets can also be transferred out of the fund as in-specie payments, although only lump sum payments can be made in-specie.
If you are in pension phase, pension payments have to be made in cash.
However, the rules on acquisitions from members do not apply to these transactions as the SMSF is disposing of the asset, not acquiring
Before attempting to make an in-specie contribution to your fund, its best to check your SMSF trust deed to confirm if you are allowed to
make in-specie contributions and whether there are any rules or restrictions around what assets members can make as an in-specie
This information is of general nature only and is not intended as a personal advice. It does not take in to account your particular investment objectives, financial situation and needs. Before making a financial decision, you should assess whether the advice is appropriate to your individual investment objectives, financial situation and particular needs. We recommend you consult a professional financial adviser who will assist you. Any references to past investment performance are not an indication of future investment returns. You should also obtain a copy of and consider the Product Disclosure Statement (PDS) for any financial product mentioned before making any decision to acquire a financial product.