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Investor Education > Wrap Accounts > Transferring wrap accounts

SWITCHING WRAP ACCOUNTS WITH IN-SPECIE TRANSFERS

 

In specie is latin for "in its actual form". In the world of investing, in specie transfers generally refer to the transfer of assets from one account to another - generally from one investment platform to another - without selling the underlying investment.

Where there is no change in beneficial ownership of the assets, a capital gains tax event does not get triggered. . An in-specie transfer also avoids the buy- and sell-costs associated with moving investments.

For most wrap accounts in-specie transfers are available for shares and managed funds only on investment wrap accounts. In recent years some wrap account providers are accepting the ability to in specie transfer between super/pension accounts, however in specie transfers across super and pension may trigger a capital gains tax event as it generally involves a change in beneficial ownership. In addition, stamp duty may be payable. 

There are two requirements which have to be fulfilled before the in-specie transfer can continue:

  • Assets must be held in the same name, and
  • the underlying investments must be available on the new platform.

The steps below outline the typical in specie transfer process:

  1. Investor requests that their current wrap platform begin the transfer. This will require the current wrap provider to complete an ‘Australian Standard Transfer Form’ for each investment to be transferred.
  2. Existing wrap account completes Australian Standard Transform Form as the ‘seller’ of the investments and sends the forms to the new wrap provider.
  3. The receiving wrap provider will complete the Australian Standard Transfer Form as the ‘buyer’
  4. The completed forms are sent to the relevant fund manager to amend their records.
  5. Fund manager sends confirmation to the new provider after which the new wrap platform will finalise the transfer by loading the units into their system.

The time it takes to transfer from platform depends on the investment type to be transferred. Managed investments might take up to thirty working days as there are three parties who all have to complete the paperwork. Shares are usually transferred within 10 days mainly because there is less paperwork and there are only two parties involved.

Sometimes, when transferring to another badged version of the same platform, the transfer can be completed easily using a migration form as the operator already has all of the required information. 

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