In-Specie Transfers Explained: A Case Study on Moving Shares to Your SMSF.

Smart Retirement Planning: Why John and Anne Are Moving Their Shares into Super

As a financial adviser, I often sit down with clients who are just a few steps away from retirement and ask them a simple question: Are your investments working as hard for you as they could be? For John and Anne, both 59 and planning to retire at 60, the answer led us to a strategy that’s often overlooked but incredibly effective—an in-specie transfer of their personally held shares into their self-managed super fund (SMSF).

It’s a move that doesn’t involve selling anything, doesn’t require timing the market, and—done right—can significantly reduce the tax they’ll pay on their investments.

Let’s unpack how it works and why it’s such a smart play for people in their position.

What’s an In-Specie Transfer?

Put simply, an in-specie (or off-market) transfer is when you move an asset—like shares or property—into your SMSF without selling it first. Instead of cashing out and contributing the money, you transfer the asset itself.

It’s a great way to keep your investments intact while shifting them into a more tax-effective environment. But like most things in finance, the devil is in the detail.

John and Anne’s Situation

Here’s a snapshot of where they’re at:

• SMSF balance: $900,000

• Jointly held ASX-listed shares: $720,000

• Annual incomes: John earns $200,000, Anne earns $195,000

They’ve built up a solid portfolio, and with retirement just around the corner, they’re looking to simplify things and maximise their after-tax income. That’s where the in-specie transfer comes in.

Why It Makes Sense for Them

1. They Don’t Have to Sell Anything -John and Anne like the shares they own. They don’t want to sell them just to move the money into super. With an in-specie transfer, they don’t have to. The shares move directly into their SMSF, no selling required.

2. It’s a Tax-Smart Move - Transferring shares is considered a capital gains event. But here’s the trick: if they wait until after they retire, their taxable income will drop dramatically—possibly to zero. That means any capital gains tax on the transfer will be minimal.

3. Super Is a Tax Haven - Right now, their dividends and capital gains are taxed at their personal marginal rate—up to 45% plus Medicare. Inside their SMSF, that drops to 15% in the accumulation phase and becomes completely tax-free once they move into retirement phase.

4. They’re About to Hit a Key Milestone -At age 60, they’ll meet a condition of release, which means they can shift their SMSF into retirement phase and start drawing a tax-free income. Perfect timing.

But What About the Tax Bill?

Here’s the catch: even though John and Anne aren’t selling their shares, the transfer still triggers a capital gains event. So, if there’s a gain, there’s tax to pay. But where does that money come from if they haven’t sold the asset?

This is a common stumbling block—and one we’ve planned for.

Here are a few ways to manage it:

• Use available cash reserves: If John and Anne have cash in their personal accounts they can use that to pay the tax.

• Sell a small portion of the shares: They might choose to sell just enough of their holdings to cover the tax liability, keeping the bulk of their portfolio intact.

• Stagger the transfer: Instead of transferring all shares at once, they could do it in stages over multiple financial years, spreading out the tax impact.

• Time the transfer post-retirement (my favourite): By waiting until after they retire, their marginal tax rate drops significantly—possibly to zero—meaning the tax bill may be negligible or even nil.

This is where good planning makes all the difference. We’ve modelled the potential gains and losses, looked at their cash flow, and timed the transfer to minimise the tax impact.

What to Watch Out For

Capital Gains and Losses

If the shares have gone up in value, transferring them will trigger a capital gain. For example, if they bought CBA at $50 and it’s now $177, that’s a $127 gain per share. On the flip side, if they’re transferring BHP shares that have dropped in value, they’ll realise a capital loss.

Timing Is Everything

The date they sign the transfer form locks in the market value for tax purposes. So we’re planning to do this after they retire, when their income (and tax rate) is much lower.

There Are Some Costs

Most brokers charge a fee per transfer—usually around $100. If they’re transferring shares in 10 companies, that’s $1,000. Not a deal-breaker, but worth budgeting for.

How We’re Putting It into Action

To make this work, John and Anne will use the bring-forward rule, which allows them to make a non-concessional contribution of $360,000 each into their SMSF. That covers the full $720,000 in shares.

Here’s what the process looks like:

1. Complete an off-market transfer form for each shareholding.

2. Submit the forms to their SMSF’s broker or investment platform.

3. Ensure the shares are recorded in their SMSF’s broking account, which will reflect in their member balances.

We’re also keeping an eye on their transfer balance caps, which limit how much they can each move into retirement phase. Right now, that cap is $2 million per person.

Final Thoughts

For John and Anne, this strategy ticks all the boxes: it keeps their investments intact, reduces their future tax bills, and sets them up for a more efficient retirement income stream.

But like any strategy, it’s not one-size-fits-all. In-specie transfers can be incredibly effective—but only when they’re timed and structured properly. If you’re approaching retirement and wondering whether this could work for you, it’s worth having a chat with your adviser.

Sometimes, the smartest move isn’t changing what you invest in—it’s changing where you hold it.