The partner of a chartered accounting firm has confirmed the acquisition of assets from a related party is allowable in the event of a marriage or relationship breakdown and separation, but the provision is applied strictly.
Deloitte partner and SMSF leader Liz Westover noted the exception is contained in section 66(2B) of the Superannuation Industry (Supervision) (SIS) Act and relates to a transfer of assets as a result of the separation of spouses, which is considered an acquisition.
“Thankfully there are some provisions in section 66 [of the SIS Act] that provide a carve-out or exception to the general prohibition of the transferal of assets between related parties when [the acquisition] is a direct result of a marriage breakdown,” Westover told attendees at the SMSF Association National Conference 2026 in Adelaide today.
“So make sure you have a read of those provisions because they are actually quite specific about what needs to happen. [They say] at the time of acquisition, so in other words the time of transfer, the people must be separated, that there is no reasonable likelihood that they’ll ever reconcile or re-cohabitate is actually the word in there, the acquisition is directly because of the breakdown and the asset is the member’s interest or entitlement to an interest under the Family Law Act.”
However, she emphasised how strictly the concept of the transfer being directly associated with the relationship split is applied.
“I had a case a couple of years ago where a couple remained in a super fund long after their divorce. They decided at the time that they could manage the fund together and keep the assets in there. [The fund held] some lumpy assets and they felt there was some merit in keeping it all intact,” she revealed.
“But then about five years after that they decided that actually it wasn’t working so well and they wanted to go their separate ways with respect to super.
“Unfortunately, they actually couldn’t [do this] because it was property that was in there and at the time that they were looking to transfer we could not satisfy this definition of being directly with respect of the breakdown of the marriage. That horse had long bolted.
“So they were actually stuck.”
