Government abandons in specie transfer crack-down - but does so discretely

One of the most significant SMSF recommendations arising from the Super System Review was the recommendation that in specie transfers of listed securities only be on market to remove the possibility of abuse as to the value and date of the transaction.

The Government adopted this recommendation and proposed to amend the SIS Act by introducing new sections 66A and 66B.  The effect of these sections was to require all related party transactions by which an asset was acquired by an SMSF or disposed by an SMSF to be at a price determined by a qualified independent valuer and, in the case of listed securities – the acquisition and disposal was to be a prescribed manner.

These provisions (and other related provisions) were set out as Schedule 4 to the “Tax and Superannuation Laws Amendment (2013 Measures No 1) Bill 2013”.  

The Government has now removed these provisions from the Bill.  Consequently, the latest draft of the Bill (Third Reading version) simply no longer contains Schedule 4.

The outcome is that the Government is not now proposing to regulate the acquisition and disposal of assets by SMSFs where the other party is a related party; consequently, the current position will continue.