SMSFs looking to make in-specie transfers before the end of the current financial year need to act now as these transactions generally take time to process, according to a specialist lawyer servicing the sector.
In-specie transfers often involved property and Townsends Business and Corporate Lawyers special counsel Michael Hallinan said if so, they would generally take a few weeks to process.
Hallinan said those transactions could commonly take longer to execute than anticipated due to a range of factors, including having to obtain the original certificate of title, having a redundant mortgage on title, delays in having transfer documents signed, delays in obtaining registration or stamp duty clearance, and mismatching names of the registered proprietors and the legal name of the transferor.
“As the current financial year will soon be closing, it is important to ensure that any in-specie contributions which are intended to be made before 30 June 2014 are in fact completed before that date,” he warned.
“As a rule of thumb, in-specie transfers of real estate will generally take a few weeks.”
Similarly, he said individuals wanting to make final contributions for the financial year via electronic transfer could not rely on those transactions happening instantaneously.
“All cash contributions made by electronic transfer should be made a few days before 30 June as there have been many cases where the contribution was debited to the paying account on 29 June, but not credited to the receiving account until after 30 June,” he said.
“Electronic transfers of money are not instantaneous and the contribution is received when it is credited to the receiving account.”
