Topping up in a downturn

In specie super contributions allow investors to take advantage of a market dip.

Summary: An investor with a share portfolio outside super may wish to transfer the holding into an SMSF using an ‘in specie’ contribution but would have to pay capital gains tax. If the value of the portfolio has fallen, the amount of tax payable will be lower. Investors using ‘wrap’ style funds can perform a similar transfer by selling the holding outside of super, contributing the proceeds to super and then repurchasing the same shares.

Key take-out: The current lower levels of the market effectively reduce the amount of capital gains tax to be paid on holdings and might just sway investors in favour of a transfer of assets into super.

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