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I have a client who had and SMSF with the spouse with two properties. With the marriage breakup, one of the properties will be transferred to the member's new SMSF. Should this be done as an in specie transfer at market value? Will there be CGT consequences as a result of this as there is a change in ownership from one SMSF to another or is this gain exempt?
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Hi Jan
There is CGT rollover relief under ITAA section 126-140 for divorce / relationship breakdowns in relation to the transfer of an asset from one SMSF to another SMSF.
If the requirements of the ITAA are met the the capital gain or loss re the asset transferred is disregarded and the cost base to the SMSF receiving the asset is the same as the cost base of the SMSF that transferred it.
The legislation re the relief is found at:
http://classic.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s126.140.html
Thanks
SMSF AAA