SMSF Off Market Transfer - Government Backflip

Late last year the government moved on a suggestion from the Cooper Review on the tax system. The recommendation would mean that you could no longer transfer your personally owned shares into your Self Managed Superannuation Fund (SMSF).

You would normally do this when you owned some shares in your personal name, and wanted to transfer them into your SMSF so you wouldn't have to pay tax at your personal tax rate. You could do this through an "off market transfer" (OMT). The advantage being that you could complete one form, pay a fee (usually of $54) and the transfer would be completed.

Due to the ASX Trading rules surrounding Off Market Transfer forms, you have to lodge this form within 90 days of the date of the transfer. What some advisor's read this as  that if today was the 1^st of July you could backdate the transfer form   anywhere in the previous 90 days. Not only would it mean that the transfer could be counted in the previous financial year, you could also pick a date when the share had a low price to reduce the Capital Gains Tax  (CGT) implications.  

So you can see why the Cooper review suggested to remove this "loop hole" from the 1^st of July 2013. Various superannuation specialist lobbied the government under the approach that if you were required to sell your shares to the market as an individual then buy them back as the SMSF, then you would pay hundreds of dollars in brokerage, and the increase cost would be a disadvantage.

Due to this the government decided not to proceed with the changes as it would place "inequitable and costly compliance conditions" on Self Managed Superannuation Fund. So the proposal was dropped.

This means that Off Market Transfers (OMT) into your Self Managed Superannuation Fund are still acceptable, and a useful tool to transfer value into your SMSF.