Has anybody given much thought to making an in specie contribution to their SMSF, while PM prices are relatively low? Making a contribution to a super fund in the form of an asset is known as an in specie contribution. The opportunity to make an in specie contribution is generally only available via self-managed super funds (provided a fund's trust deed permits such contributions). Most large super funds don't allow such contributions from members. In most cases a super fund can't buy or use an asset that a member owns, which also would normally cover any in specie contributions. But there are exceptions to this restriction, and my understanding (still to be confirmed) is that precious metals with prices independently determined by a large market are one of the exceptions. Listed ASX shares are another allowable exception, so you can use the same strategy with them too. This means that you could transfer your non-super precious metals (or PM shares) to your super fund while prices are low, thereby minimising any personal income capital gains taxes in the short term. In the longer term (assuming that PM prices rise again) the capital gains taxes would be minimised as super funds pay a lower rate of capital gains tax than individual taxpayers. You would also save the buying and selling costs that would be incurred if you just sold your personal PM holdings and attempted to buy a similar amount within your SMSF after making the corresponding non-concessional contribution. Of course, another point you need to keep in mind is the limit on contributions. For regular employees, in specie contributions are considered to be non-concessional, so there is a limit of $150,000 a year, or $450,000 over three years (if aged under 65). I'm assuming that this limit won't be a problem for most of us The downside is that the value of your PMs would be locked in your super fund until it goes into payout mode (for most of us, not before we turn 60). Nevertheless, this could be a cost effective and tax efficient strategy for those who want to boost their super balance, or those who are getting close to being entitled to draw down on super (and don't need to use the value of their PMs before then).
Personally I wouldnt do it because i dont trust the government as far as i can throw 'em! They cant wait to get their greedy paws on super funds - ALL super funds. I only have a SMSF because thats the best option possible under the draconian super legislation. However i dont believe in super at all - its just another form of coercion by the government to separate you from your money.
Sorry people, I may have jumped the gun on this. I still don't have final confirmation yet, but it looks like physical precious metals may not be allowable as an in specie SMSF contribution. The relevant legislation is here: http://www.austlii.edu.au/au/legis/cth/consol_act/sia1993473/s66.html Basically the law says that the regulator (ATO) can authorise the in specie contribution of an asset, but it doesn't specifically mention physical precious metals. I can't find any advice on the ATO website, and their call centre people couldn't answer my question. So it is looking unlikely for physical metals, but it has been confirmed to be OK for paper metals (GOLD, PMGOLD, ETPMAG etc). In any case, the answer will be different for different people depending on what their SMSF trust deed says.
You ask the specialist lawyer this sort of question, not an Internet forum. You have got SIS (super) act on the Net, check the section 66. (And maybe 71). Looks like it may work for for paper silver or gold, but I find it difficult to interpret this so it fits physical as 'listed security on licenced market'. Maybe COMEX or LBMA bar? I don't know, I'm not a lawyer, and don't have nor plan to acquire that kind of physical anyway.
Serb You mistake me for someone who has faith in professionals.....I do not I am quite happy asking the question here....each to his own,yes. There is no substitute for getting advice from people who are actually putting their money where there mouth is. I researched the topic and could find no reference any where that verified the assumption made,however I thank the original poster immensely for putting himself out there and bringing the topic to my attention. Keep paying your fees I'll be ok asking real people. REDBACK out
OT sorry, OP. Boston, without too much detail, what happened? Couple of months ago setting up an SMSF was easy according to you. You had one for years, too hard now? I know it's a very personal answer so just be vague in your reply. Or just post back "MYOB".
Aw spider - where's the love? Of course, you collect the ideas from real people who have a common interest. That's what this forum is for. But when you think about doing something like this which can be interpreted by ATO as CGT underpayment, you don't ask ATO or the forums whether it is 'allowed'. You read up on it yourself - SIS act is a riveting read, innit? Then if you think it is worthwhile, you go to a professional and ask him/her how to do it. Professional means - in this case most likely - a tax lawyer. Not a financial planner, not an accountant, not a wholesale SMSF administrator. This well may be the best money you ever spent. But it may not be, it depends. On how long you have to wait to take money out of the super; on the size of your stack you are trying to minimise CGT on; on size of your super assets you are risking making non-compliant (if that is the ultimate penalty); if silver goes up or down by the time you sell and have to pay CGT; if you ever get audited or simply fly under the radar. So I meant well - and I'm real, too
AW Srebrni,too cool response. I have zero confidence in Professionals related remotely to the money world and i cringe when i hear the moniker Expert at the end of a name. Spruiker,money monger,con artist-yes Disagree re the ATO,get a ruling for finality only way to be sure. Ever seriously given a thought to the absurdity of the waiver signature on your end of year tax return. How about this-the next time for example an Electrician does some work at your house,take pause and imagine if he asked you to sign a waiver for his work undertaken you would seriously be buying a fire extinguisher. Yet all these financial Cling ons free themselves in one way or another from responsibility. I believe in people becoming financially educated and weaning themselves off the Status quo Experts. I had a Smart financially wise friend who used to say-If you can't understand the language a contract is written in-its been written to screw you. Or the first question you should ask a financial advisor is, "What is your net worth?"(95% cant answer this basic question) The best money i ever spent was setting up my own SMSF-period. Take care Made of silver,this has been Golden REDBACK
It's true, I have had a SMSF for quite a few years now, and setting up a SMSF is very easy. Too easy - think about that! But I can see the writing on the wall, and with the world economies, and by extension their governments, literally going to the wall. It does not take much to visualise that our esteemed government, changing the rules that govern SMSF to the trustees detriment. Consequently, I elected to pay all the penalities, and get what was left to do as I please. The potential alternative was, in my opine, to loose any lump sum or self choosen variable sum pension, in lieu of a government set weekly stipend which may be just adequate to live. I just do not trust governments, and particularly this government, to not change the goal posts!
I just sent off all my doco for esuperfund and am eagerly waiting for the pack to arrive so I can get going, hopefully.......before silver bounces back.
