tumblr visit counter
Free SMSF Setup

Investing with a related party

SMSFs can invest with a related party entity to acquire the desired assets.

  • as tenants in common with a related party. This method is very common to buy residential or commercial properties.
  • using a unit trust.

There are three areas that needs to be considered when an SMSF transacts with related parties:

  • The assets are owned by a related party before the acquisition.  Please note if the assets to be acquired is form a related party,  S.66 of SIS Act must be met. The allowable assets are listed securities, business real properties, widely held unit trust etc.
  • Non-arm’s length income (special income) provisions. Transacting on terms that are not commercial can result in the non-arm’s length (special income) provisions of s273 of the ITAA(1936) AND s295-550 of the ITAA (1977) being applied.
  • Agreements to circumvent the in-house assets test. S.85 of the SIS Act prohibits an SMSF from entering into any scheme to avoid the application of the in-house assets rules.

When you invest with a related party, please consult with us to ensure your SMSF will not beach s.62 sole purpose test, s.66 acquiring assets from related party rules and s.85 as mentioned as above.

 

 

 

Enquiry Now

Enquiry Now