The Netwealth in-specie transfer forms can be used for the transfer of listed securities and managed funds from external parties into the Netwealth platform without the need to sell. Capital Gains Tax (CGT) may be triggered depending on whether the transfer has occurred with or without a Change of Beneficial Ownership (CBO or NCBO).
In this guide, we cover the following:
- CBO and NCBO
- Supporting Documents Required
- How to complete the form
- Step 1: Provide Netwealth Account Details
- Step 2: Transferring Domestic Assets
- Step 2A: Annexure A
- Step 3: Transferring International Assets
- Step 4: Limited Power of Attorney (LPOA)
- Submit the documents
- Frequently Used Terms
- Frequently Asked Questions
Pre-completion checks
Before completing the form, ensure this form is the right form for this scenario:
- If this is a transfer between accounts held within the Netwealth product, please complete the 'Withdrawal' form instead.
CBO and NCBO:
An in-specie transfer can result in one of two outcomes – Change of Beneficial Ownership (CBO) and No Change of Beneficial Ownership (NCBO):
- CBO: This occurs when the entity that ultimately benefits from the asset changes. A CBO transfer may trigger a Capital Gains Tax (CGT) event for the original owner. In this case, the CGT cost base is reset, as the assets are effectively treated as being sold and repurchased by the new owner.
- NCBO: Here, the beneficial owner remains the same, so a CGT event is generally not triggered. However, the entity must retain the original cost base and acquisition dates for tax reporting purposes when the asset is eventually sold. The CGT position is not reset in an NCBO transfer.
Change of Beneficial Ownership Example
Francesca holds 1,000 units of BHP purchased at $20.00 per unit on 04/08/2016 within a family trust account and wants to move them out of the trust to be held directly by herself. A change in beneficial ownership will occur, as the previous beneficial owner was the trustee of the trust account, and the new owner is Francesca. The shares are now worth $25.00 on 15/07/2017, so the trust will also have to pay tax on the capital gain of $5,000 ($20,000.00 purchased, $25,000.00 transferred) that the units made during the time they were held in the trust.
No Change of Beneficial Ownership Example
Now that Francesca holds the BHP units directly, she wants to move them into her personal Netwealth WRAP account on 10/07/2018. In this instance, Netwealth is only the Custodial owner of the asset (Custodial owners hold an asset behalf of the beneficial owner via a Custodial Agreement), and Francesca is still the beneficial owner. As this does not trigger a CGT event, Francesca needs to provide Netwealth with the cost information of $25.00 per unit, and the date she took ownership of the holding (15/07/2017). This allows Netwealth to report accurate tax information for Francesca.
Supporting Documents required
- Always obtain the latest version of the Netwealth in-specie form directly from the Netwealth platform
- For Wealth Accelerator: In-specie transfer form
Before completing the in-specie form, please ensure all assets have been reviewed and confirmed that the asset can be held on the Netwealth platform. If the asset approval process takes longer than 90 days, it may result in a request for a new in-specie form.
- Cost base information. This must be provided in excel format. Ensure it shows the date of purchase, number of units and original cost/adjustments for each parcel. This enables Netwealth to provide an accurate annual tax statement.
Transfers are unable to be initiated until the cost base information is provided for NCBO transfers.
- Portfolio valuation. Ensure that it is accurate and up to date. In the case that the transfer results in a change in beneficial ownership, the portfolio valuation enables Netwealth to review the current state of the portfolio as the transfer from the external party is initiated.
- For direct holdings, it would be beneficial to provide a copy of ASX, international and managed fund holding statements so Netwealth can confirm the registration details.
How to complete the form
Step 1: Provide Netwealth Account Details
Everyone should complete Step 1.
When completing the in specie transfer form as part of a new Wealth Accelerator account application, the 'Account Name' section must exactly match the name on the Wealth Accelerator application form.
Step 2: Transferring Domestic Assets
It is important to specify whether the transfer should be treated as:
CBO (Change of Beneficial Ownership) or NCBO (No Change of Beneficial Ownership)?
- A CBO (Change of Beneficial Ownership) which results in a CGT event and an updated copy of the portfolio valuation is required or,
- A NCBO (No Change of Beneficial Ownership) which will not result in a capital gains tax (CGT) event and requires adjusted cost base information.
What type of holding is the transfer coming from?
Please tick the applicable option, Platform or Broker.
If the assets are being transferred directly from a share registry (held on an SRN) or fund manager, this portion of the in-specie transfer form can be left blank. You are still required to complete Annexure A.
Platform Transfer(Full Transfer):
Select 'Platform' and ensure the highlighted sections have been completed.
It is important that the name of the account provided in this section matches the exact name as held with the platform where the assets are being transferred from.
Broker Transfer (Full Transfer):
Select “Broker” and ensure the highlighted sections have been completed
It is important that the name of the account provided in this section matches the exact name as held with the broker where the assets are being transferred from. HIN will always start with an "X" and Broker PID is a unique CHESS ID that allows Netwealth to identify the brokers CHESS details. Please note that cash cannot be transferred from brokers (as stated on the form).
The additional comments section allows you to provide additional information. This could include providing any Margin Lending facilities, or information on when the certified ID has been sent to the counterparty/platform to fulfil KYC requirements.
Step 2A: Annexure A
Annexure A must be used to provide an overview of adjusted cost base information when transferring a few assets, a specific number of units or all assets. Cost base details should be submitted in an Excel spreadsheet, including the breakdown of units and other relevant information, especially when multiple tax parcels are involved. Annexure A should also list the total units and asset details, allowing clients to review the transfer request before signing the form.
Issuer Sponsored: An SRN is required and is usually issued by the registry. SRNs start with "10".
Directly held managed funds: The investor number with the fund manager is required along with the asset code (for managed funds, it is generally an APIR code) and the name of the security to proceed. As the asset/APIR code is unique to each managed fund, it is important the code quoted is accurate. Although providing a name is beneficial, Netwealth will always reference the asset/APIR code to accurately identify the managed fund.
Partial transfer: Transfers can be partial in two ways, either by specifying the number of units to be transferred or, by selecting specific assets to transfer from a range of assets held with the counterparty. For partial transfers associated to brokers/platforms, please ensure you reference the HIN/investor number.
Step 3: Transferring International Assets
The same principles as above will be applicable to international assets in context with the relevant information required such as stock exchange, ticker/security ISIN etc. Please follow the steps above in context with international asset information and counterparty information.
Step 4: Limited Power of Attorney (LPOA)
The Netwealth in-specie transfer form encompasses a Limited Power Of Attorney (LPOA). This enables Netwealth to act on behalf of the account for the purpose of transferring assets.
LPOA gives authority to Netwealth to act on behalf of the account holders to assist with the transfer of assets outlined on the in-specie form (and only those assets). To complete this section, the current registered owner/s of the assets must complete the required details on the form, and sign where indicated.
Depending on the account type assets are being transferred from, you may need to complete one or multiple LPOA as follows:
| Account Type | Details for signing |
| Corporate trustee for SMSF or Company | Multiple directors may sign in the signatory section. Company details to be provided on the LPOA |
| Trusts (including SMSFs) with individual trustees | Multiple Trustees may sign in the signatory section. Signatures need to be witnessed. |
| Joint accounts | Multiple account holders may sign in the signatory section. Signatures need to be witnessed. |
| Individual accounts | Signature needs to be witnessed. |
It is important that the LPOA reflects the account details of the counter party from which the assets are being transferred from. This includes name of account, trustee names applicable (corporate or individual) and address as held with the counter party.
Print, sign and submit with the supporting documents
The form needs to be provided by mail, or uploaded using the adviser or client upload facility. If the upload facility is utilised, Netwealth may also request a copy of the original. The original may be requested by the counterparty or required by Netwealth for internal review. This can be at a later stage and Netwealth request the adviser to retain the original for up to seven years after uploading.
The in-specie transfer form only requires one set of signatures at the end of the form. By signing, the signatories are confirming that the form has been reviewed to be true and correct before signing the form. The form holds two sections. The first section is relevant to individual account holders, individual trustees or joint account holders. The second section is relevant to companies and corporate trustees where the sole director, director/secretary or director’s may sign to authorize the transfer instruction.
Signing must be witnessed for all signatories who are individuals, individual trustees or joint account holders. Witnesses must be over 18, not involved in the transfer (i.e. not from the transferring or receiving parties), and must witness the signing in person.
Frequently Used Terms
| Term/Acronym | Definition |
| 005 | Transfer of ASX Shares being held by a Broker using the clients HIN. |
| 015 | Transfer of ASX Shares from the clients holding under an SRN provided under an Issuer. |
| 001 | Transfer of ASX Shares or Managed Funds from an external platform to Netwealth. |
| Directly Held Managed Fund | Managed funds held by the client through various fund managers (e.g. Fidante, Antares & Morningstar etc). |
| HIN | Holder Identification Number - a unique ID issued by the ASX when securities are held through a broker (e.g. AusieX, Bell Potter etc). |
| SRN | Security Reference Number - references the unique ID issued when securities are directly held with the fund registry (e.g. Computershare, Link etc). |
| ASTF | Australian Standard Transfer Form - a form that is often used in conjunction with the in-specie transfer form. |
| CBO | Change of Beneficial Ownership. |
| NCBO | No Change of Beneficial Ownership. |
| LPOA | Limited Power of Attorney. |
| NCB | No Cost Base - Referencing assets where adjusted cost base is not provided at the time of a No Change of Beneficial Ownership transfer. |
Frequently Asked Questions:
What if the adviser or client is unable to provide adjusted cost-base information for an NCBO transfer?
Adjusted cost-based information is uploaded by Netwealth to ensure tax reporting can be generated at the end of each financial year. If adjusted cost base information is not provided, Netwealth is unable to commit to providing annual tax reporting on assets where cost base is not provided.
Netwealth are also unable to guarantee that cost base information can be added on after the assets have been transferred to the platform. In some instances, if cost base is not provided at the time of transfer, Netwealth may be able to assist with correcting or adding cost base information at a later stage. This may incur a $20 per asset fee and is subject to 30 days processing time.
Assets without a cost base are also exempt from being transferred into a managed account model. No cost-based transfers are subject to the asset transfers manager’s approval and will be reviewed on a case-by-case basis.
What is the purpose of providing a current portfolio valuation (PV)?
A portfolio valuation will provide insight on what assets are currently held in the account from which the assets are being transferred. This is useful where Netwealth will be completing a full transfer as it will allow reconciliation of the number of units requested (where specified), the number of units the account currently holds, and the number of units provided in the adjusted cost base. This reconciliation will ensure that appropriate cost base information is applied, and all units held on the counterparties end are requested by Netwealth to conduct a full transfer of each asset requested.
Can the LPOA associated with the in-specie transfer form be used to commence the administration of non custodial investments (NCI) associate with the multi-asset portfolio services (MAPs)?
No, this is because the LPOA associated with the in-specie transfer form stipulates that it is only for the use of transferring custodial assets. Therefore, our compliance and fund managers that Netwealth liaise with administer NCI would not be able to accept this LPOA.
What if the clients do not wish to complete the LPOA?
A limited power of attorney enables Netwealth to provide assistance and increase efficiencies by liaising on behalf of the investor where completed. Where a client wishes to transfer their assets in an alternative manner, Netwealth may be able to complete the Australian Standard Transfer Forms (ASTFs) for the client to sign and return. Without a LPOA, Netwealth may not be able to follow up, request further information or act on behalf of the clients for the purpose of transferring the assets. The LPOA is null and void once the last asset has been transferred. The LPOA allows Netwealth to complete Australian Standard Transfer Forms on the client's behalf and liaise with counterparties to conduct the transfer.