In-specie transfers out of an SMSF

We often read about SMSF members being able to make contributions to their super fund using assets instead of cash, referred to as in-specie contributions. Less well covered is the fact that SMSF members can access their super benefits in this same way.

Most SMSF trust deeds allow members to access lump sum benefits by way of an in-specie member benefit payment by transferring the ownership of an asset held in their SMSF to themselves personally.

Accessing super benefits this way can be an effective strategy for certain SMSF members where continued ownership of the relevant asset is a priority. It also provides an alternative option or strategy for SMSF members who do not want to use their own personal resources to acquire the asset from their SMSF.

Before you start moving assets out of your SMSF, you need to consider a number of issues, including how these payments affect both you personally, and your SMSF.

How the payment is treated

An in-specie benefit payment is usually treated as a lump sum member benefit. It can’t be treated as a pension payment from your fund.

You would therefore need to have met a condition of release that allows full unrestricted access to your member benefits. You would also need to have sufficient “unrestricted non-preserved member benefits” for this to work.

If you are over age 65, or you retired after age 60, you would most likely have unrestricted non-preserved benefits. There are other events that may have occurred that resulted in your benefits becoming unrestricted non-preserved, so check your benefit details in your member statement.

Fund specific rules