How to tackle distributions with a $3m super fund
The upcoming $3 million superannuation cap means investors need to think carefully about how distributions are treated under tax rules.
Q: I have an SMSF with a balance exceeding the upcoming $3 million cap. The fund assets are predominantly listed shares plus about 8 per cent in cash and a similar percentage of illiquid unlisted companies and managed funds. The SMSF is in pension mode and to both simplify fund administration and reduce the value of the fund towards the proposed cap, I intend to make in specie lump sum distributions of the illiquid assets to myself. My understanding is that such distributions will trigger CGT events for the SMSF as the value of most of the assets I plan to distribute has increased during the period of ownership by the SMSF. I have also accumulated capital losses within the SMSF, and assume I can offset any gains to the extent of the losses. Could you please comment and either confirm or correct my understandings?
Richard
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