Restrictions on SMSFs accepting contributions

Acquiring assets from related parties

Generally shares or options transferred to an SMSF under an ESS are considered to have been acquired from the employee (who is usually a related party of the fund).

An SMSF trustee can acquire shares or options in companies from related parties as long as they are acquired at market value and either:

  • the shares or options are listed on the Australian Securities Exchange (ASX)
  • the company is a related party of the SMSF and the acquisition will not result in the level of in-house assets of the fund exceeding 5%.

If listed shares or options are transferred to an SMSF for no consideration, or for less than market value consideration, but the difference between their market value and the actual consideration paid (if any) is treated as a contribution, the shares or options will be considered to have been acquired at market value.

Shares or options in companies that are not related parties of an SMSF, and are not listed on the ASX, cannot be acquired from related parties of the SMSF.

See also:

  • SMSFR 2010/1Self Managed Superannuation Funds: the application of subsection 66(1) of the Superannuation Industry (Supervision) Act 1993 to the acquisition of an asset by a self managed superannuation fund from a related party.

Other restrictions

The contributions your SMSF can accept are restricted by:

  • the age of the member the contribution is made for
  • whether the SMSF has a valid tax file number (TFN) for the member
  • the amount of the contribution, if the contribution is a fund-capped contribution (this is generally a contribution made by, or on behalf of, the member and does not include employer contributions).

If your SMSF cannot accept the contribution for the member, you must, within 30 days of becoming aware this, return the amount to the person or entity that made the payment.

See also:

    Last modified: 16 Jun 2016QC 26221