Simpler super - selling or transferring assets |
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How capital gains tax (CGT) might apply You can contribute up to $1 million of non-concessional contributions to your superannuation fund between 10 May 2006 and 30 June 2007 without being liable for the new excess non-concessional contributions tax that applies in that transitional period. As a result, you may:
In either situation, you will trigger a CGT event when you:
Even if you receive no capital proceeds from the CGT event, you may be taken to have received the market value of the asset at the time of the CGT event. Some capital gains – such as a capital gain you make on your family home – may be disregarded. In some cases, your self managed super fund may not be allowed to acquire the asset from you. For example, residential investment properties cannot be transferred to a superannuation fund – see ‘in specie’ contributions below. You should seek professional advice if you are planning to sell or transfer an asset to take advantage of the $1 million transitional non-concessional contributions cap. You should also ensure that funds are set aside to meet any CGT liability you incur from selling or transferring assets to your super fund. Selling small business assets and CGTWhen making contributions between 10 May 2006 and 30 June 2007, you can choose to exclude amounts from the disposal of small business assets from your $1 million cap – effectively allowing you to exceed the cap. However, these excluded contributions are limited to the CGT cap of $1 million. For more information about the exclusion of small business assets, refer to the fact sheet Simpler super – exclusion from the transitional non-concessional contributions cap. (Nat: 70645) ‘In-specie’ contributionsGenerally, trustees of self managed superannuation funds are prohibited from acquiring assets from related parties – such as fund members, their family, and partners, related companies and trusts. However, there are some exceptions. Therefore, if you’re a member of a self managed super fund you should not contribute your own assets or assets of your associates unless the asset is:
Each of the assets must be acquired by the self managed super fund at market value. You cannot transfer a residential investment property to your self managed super fund. It is not covered by the above exceptions. The transfer of an asset ‘in specie’ is a CGT event as the transfer is a disposal. You may make a capital gain or loss from the CGT event according to the usual CGT provisions that apply to that asset. If you make an ‘in specie’ transfer, CGT may still be payable as you may be taken to have received the market value of the asset at the time of the CGT event. Depending on the situation, a market valuation may be undertaken by either a qualified valuer or a person without formal qualifications. In any case, the person who conducts the valuation must base their valuation on reasonably objective and supportable data. Use of a qualified valuer should be considered where the value of the asset represents a significant proportion of the fund's value or where the nature of the asset indicates that the valuation is likely to be complex or difficult. More informationTo obtain a copy of our publications or for more information about CGT or SMSFs:
Australian Taxation Office If you do not speak English well and want to talk to a tax officer, phone the Translating and Interpreting Service on 13 14 50 for help with your call. If you have a hearing or speech impairment and have access to appropriate TTY or modem equipment, phone 13 36 77. If you do not have access to TTY or modem equipment, phone the Speech to Speech Relay Service on 1300 555 727. |
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