SMSF contributions

We are considering starting a Self Managed Super Fund and have heard that these funds generally possess more flexibility regarding the acceptance of superannuation contributions than publicly offered and industry superannuation funds. Is this correct?

Yes, this is correct because of the ability of a Self Managed Super Fund to accept non-cash contributions. A non-cash contribution is also referred to as an in-specie contribution. An in-specie contribution occurs where an asset is transferred to a superannuation fund by the member or on behalf of the member. The amount of the contribution is equal to the market value of the asset transferred to the fund. An in-specie contribution should be distinguished from an in-specie transfer, where the asset is actually purchased by the Self Managed Super Fund.

The Tax Act does not prohibit in-specie contributions and allows the contributor to qualify for a tax deduction under the employer and personal deductibility provisions. However, there are further conditions that apply and you should seek professional tax advice.

An in-specie contribution made by a member may contravene the SIS Act if the investment standard prohibiting the acquisition of assets from related parties is breached. A Self Managed Super Fund is generally prohibited from acquiring assets from related parties of the fund, although there are some exceptions to this rule. Again it's worth seeking professional tax advice.

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