There are ways individuals can minimise CGT when transferring shares to their super fund.
Individuals can transfer shares to an SMSF by completing an off-market transfer, also known as an in-specie transfer. It involves transferring securities between two parties without using a stockbroker and means that the shares in question do not have to be sold.
Because the sale involves changing the beneficial ownership structure of the shares from an individual’s personal name to the name of the super fund, it may trigger a capital gains event.
A capital gains event means that an individual may have to pay capital gains tax if they made a profit on the shares being sold. One way to minimise this tax is to group transfers of shares with losses with any shares that have gains, which can offset the probability of paying tax.
Alternatively, individuals can maximise their concessional contributions in the year in which the share transfer occurs via salary sacrifice which can lower their taxable income and thus lower their capital gains liability.
To manage their tax liability more efficiently, individuals should consider transferring different tranches or combinations of tranches over several financial years. Seek professional advice when calculating capital gains tax or using the combinations mentioned above.