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Cutting tax on share transfers

While the transfer of shares from an individual to their super fund will trigger a CGT event and therefore capital gains tax, there are ways individuals can minimise this.

Individuals can transfer shares to a self-managed superannuation fund (SMSF) by completing an off-market transfer, also known as an in-specie transfer. An off-market transfer is the transfer of securities between two parties without using the services of a stockbroker. It 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 the tax payable 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 also 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. Seeking professional advice can help when calculating capital gains tax or combinations mentioned above.

Posted on 20 January '16 by , under Tax.

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What to consider when consolidating your super

The ATO reported that 45% of working Australians were not aware that they had multiple super accounts in 2016. Having multiple super accounts is particularly common for individuals who have had more than one job. If this is you, it is important to identify and manage your super accounts because having more than one can be costly as a result of account fees from multiple funds.To combat this, you may want to consolidate your super, which moves all your super into one account. Not only does this save on fees, but it also makes your super easier to manage and keep track of.

Before consolidating your super, it is important to do the following:

Research your funds' policy
Compare your active super accounts so you can make the right choice about which one you should close. Things to assess include:

  • Exit fees
  • Insurance policies
  • Investment options
  • Ongoing service fees
  • Performance of the funds

Check employer contributions
Changing funds may affect how much your employer contributes, as some employers contribute more to certain funds. Check your current accounts to see if changing funds will affect this. Once you have selected a super fund, regardless of whether you choose a new super fund or one of your existing ones, provide your employer with the details they need to pay super into your selected account.

Gather the relevant information
When consolidating your super, you will need to have the following details ready:

  • Your tax file number.
  • Proof of identity. This could include your driver's license, birth certificate or passport.
  • Your fund's superannuation product identification number (SPIN).
  • Your fund's unique superannuation identifier (USI).
  • Details of your previous fund.

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