Self-Managed Super Fund

A common strategy involves a taxpayer selling listed securities and commercial properties into their SMSF. The title of the investments is transferred to the SMSF name, and all subsequent income generated by the investments will be attributed to the SMSF.

There are a few things that need to be considered when utilising this strategy:

Firstly, the sale of the investments need to be done at market prices, which may result in a tax liability for the taxpayer. 

Secondly, if a commercial property is sold to the SMSF, there is the issue of stamp duty levied on the transfer. The cost of the stamp duty varies greatly, depending on the State Government, the property is located in.

Benefits of this strategy can include:

• The taxpayer can receive a tax deduction for superannuation contributions into the SMSF for transferring the investments. This is subject to the concessional superannuation contributions cap.
• The tax liability for income generated by the investments in the SMSF are taxed at the maximum rate of 15%.
• Investments in the SMSF are protected from creditors in the event the taxpayer has to declare bankruptcy.
• Depending on the SMSF's taxable income, all or part of the imputation credits on the SMSF's investments may be refunded by the ATO.

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