In-specie Transfer Unlisted Unit Trust or Other Assets Due to Marriage Breakdown

Under the Family Law Act and Division 126 of the Income Tax Assessment Act 1997, CGT rollover relief may be available where an asset transfer occurs as part of a superannuation split arising from a court order or a formal superannuation agreement.

When Can CGT Rollover Relief Apply?

CGT rollover relief may be available where:

• The transfer is made because of a marriage or relationship breakdown;
• The transfer is carried out under a court order or a formal superannuation splitting agreement;
• The receiving fund is a complying superannuation fund; and
• The transfer satisfies the relevant requirements under the tax and family law legislation.

Where the rollover applies, any capital gain or capital loss that would otherwise arise from the transfer is generally disregarded at the time of transfer.

In-Specie Transfers Between SMSFs

In many cases, assets can be transferred in specie, meaning ownership of the asset is transferred directly without first selling the asset and transferring cash proceeds.

Common assets that may be transferred include:

• Listed shares;
• Managed funds;
• Commercial property; and
• Other eligible SMSF investments.

Care must be taken to ensure the transfer is properly documented and completed at market value in accordance with SMSF and taxation requirements.

Transfers Not Related to a Marriage Breakdown

Where an in-specie transfer between SMSFs is not connected to a marriage or relationship breakdown, CGT rollover relief is generally not available.

In these circumstances:

• A CGT event will usually occur at the time of transfer;
• The transferring SMSF is generally taken to have disposed of the asset at market value; and
• The receiving SMSF acquires the asset at its market value on the date of transfer.

Depending on the type of asset and the State or Territory in which it is located, stamp duty may also apply.

Need Advice on an SMSF Asset Transfer?

In-specie transfers can be an effective way to move assets between SMSFs, however they must be structured correctly to comply with superannuation and taxation laws.

If you would like advice regarding an SMSF asset transfer, CGT rollover relief, or an SMSF divorce settlement, please contact iCare SMSF on 03 9557 3138 or email info@icaresuper.com.au.

Disclaimer

The information provided above is general in nature and does not constitute legal, taxation or financial advice. The availability of CGT rollover relief depends on the specific facts of each case and the documentation supporting the family law settlement. You should obtain independent professional advice before undertaking any SMSF asset transfer or implementing a superannuation splitting arrangement.