SMSF members making an in-specie contribution of listed stocks should not rely on older valuations sourced from a share registry, two SMSF specialists have noted.
Heffron SMSF specialist Sean Johnston said the idea that an in-specie contribution of listed stocks could use share registry valuations up to 90 days old was not applicable to SMSFs.
“One of the things that’s caused the biggest headache over the last five years is there was something published by the registries that said you could use a value within three months of a transfer date,” Johnston said.
“We still have people operating with that as an assumption because the registries allow it.
“However, SMSFs and super funds in general don’t have that concession and quite often we do still come across that problem where somebody has picked a date somewhat removed [from the contribution].”
Heffron senior SMSF specialist Annie Dawson said this valuation figure was important because people making an in-specie contribution must show the fund paid market value at the time the contribution was made and may be confused as to when this takes place.
“The relevant type of ownership will depend on whether the paperwork was done correctly to begin with,” Dawson said in a recent online technical session.
“Assuming we are moving listed shares and doing an in-specie transfer, we would expect to see an off-market share transfer form and let’s say it is completed correctly and signed and dated on 25 June.
“If that was posted to the share registry and it wasn’t until 1 July the registry received the paperwork and then it doesn’t process it and update the change in legal ownership from the member to the fund until 5 July, when was the contribution made?
“The ATO commissioner has said he is willing to accept the contribution was made when beneficial ownership passes to the fund, provided the legal ownership comes shortly thereafter.
“So even though legal ownership didn’t kick off until 5 July, we can record a contribution was made in the 2025 financial year because we did the paperwork right.
“We need to keep records of the transfers and, importantly, want to see the market value of the shares as at 25 June when the contribution was made.”
