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 up to 85% of concessional contributions that you have paid into your super fund in the previous financial year. The remaining 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 to take maximum advantage of having two Transfer Balance Caps where one spouse is close to their cap and the other spouse is well under their Transfer Balance Cap of $2 million (2025/2026). 

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 or business real property 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 fund 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 made within the super environment whilst in the pension phase.