Off market share transfer dates

[jillybean45]

I have conflicting advice from two different accountants regarding the date of sale/purchase of shares through an off market transfer from my personal portfolio to my SMSF. If the transfer document is dated 25 June (just prior to the end of the financial year) and the Chess statement recording the transaction is dated 7 July, what date do I use? This could have enormous implications regarding contribution limits to an SMSF and penalties for excessive contributions.

 

[Country Lad]

I can't give you advice, but based on experience, I can give you a bit more conflicting stuff.

The date of the sale will be whatever the ATO decides it will be.

This was often a point of debate when I was selling businesses. The effective time of the sale according to the ATO for property transactions is at the time the contract is executed, which of course is a nonsense because consideration has not been made and the contract has not been completed, and may not be for a number of reasons.

For other types of contracts, it is generally accepted that it is the date it is completed.

The sale of shares is contractually based, so my view, based on previous advice I have received, the effective date of the sale in your case is 30 June (T+3).

The Chess statement date is irrelevant as that has nothing to do with the settlement of the contract for the sale/purchase of the shares. It simply records that there has been a transaction some time ago and a transfer of shares.

Cheers
Country Lad

 

[jillybean45]

Thanks Country Lad!

 

[simplewealthguy]

Have a look at an article published in the Australian on June 15 2011 It suggests that the ATO have considered that the transfer took place on the day that the SMSF received the completed and correct off market transfer form. If the trade settles in the next financial year, you can consider that the super fund received the contribution on the date on the OMTF. However, the trustees must keep a record of these forms. Otherwise the ATO can use the settlement date and this can be very costly in terms of blowing your contribution caps.
This is not advice, merely my interpretation of the info in the article.