Complex Superannuation Strategies

Contribution Splitting and In Specie contributions

Contribution Splitting

Contribution splitting involves splitting certain of your super contributions across to your spouse. Super regulations provide the ability to split to a spouse up to 85% of concessional contributions paid into a super fund in the previous financial year. The additional 15% represents the contributions tax that was withheld by the super fund when it received your concessional contributions. These contributions split with your spouse will still fully count against your own contributions caps but may help to build up savings in the names of both members of a couple. This may be a valuable strategy for couples that have one spouse over and one spouse under the Transfer Balance Cap in order to take maximum advantage of having 2 Transfer Balance Caps. The strategy may also be used to minimise the super balance of a member to assist them in becoming eligible for an aged pension. Super held in the name of a spouse under aged pension age is exempt under both the assets and incomes means test for aged pension purposes. A member is not able to split non-concessional contributions with their spouse.

In Specie Contributions

In certain circumstances you may be able to transfer the ownership of certain assets from yourself to a self-managed super fund, known as an ‘in specie’ contribution. For example, you could transfer direct shares from your own name to your super fund as a personal contribution (subject to restrictions with concessional and non-concessional cap limits). Earnings generated from assets held in a super funds are taxed more favourably than assets held in the individual name of the member. In addition, no tax is payable on capital gains made on the sale of investments in pension phase.