Australia Income Tax Treaty exempts superannuation from U. We can provide a Tax Opinion to secure the legal exemption. Can you sell a property to a SMSF? Is smsf considered contribution?
What is the duty on SMSF land? A residential property that is personally owned can be transferred into an SMSF if so desired as long as the trustees can prove it is being used for business purposes and not merely as a rent-generating investment, a financial services law firm has stated. Under a limited set of circumstances, it is possible for SMSF members to make non-cash contributions , also known as in-specie contributions, to their funds. One way in which this can be done involves the transfer of a ‘business real property’ to an SMSF. Using a combination of the non-concessional contributions cap and the CGT retirement exemption, it can be possible for business owners to transfer their commercial property into their SMSF with a number of tax advantages.
Duty is exempted under S 36A. Contribution of property from an individual to their SMSF. For this article, let us just consider and above. Some issues that need to be considered.
In specie distribution. As you know, this does not apply when an SMSF buys a property. Currently, the property title is under husband and wife name and has not been constructed yet. The intention to transfer to SMSF, because this property is going to be used as an income for retirement later on.
The owner age about and years. Others talk about an “In Specie transfer or lump sum payments or take property out as a lump sum. Rather than ownership of the property as tenants in common, it is possible to transfer the property to a unit trust or company that satisfies SIS Regulation 13.
Providing the unit trust or company meets certain conditions then the shares or units held will not be included in the in-house assets of the SMSF. The SMSF would have to transfer $ 120of cash or other assets to effect the sale on that portion of the property. For shares most SMSF investors have a CHESS sponsored account so you should ask your broker for their Standard Transfer Form for Off Market Transactions. Depending on the documentation in place for the transaction you may be able to apply for a retrospective re-assessment and obtain a refund. An SMSF specialist lawyer would be able to advise you on this.
This form is available from any financial institution involved in securities trading. The SMSF should be listed on this form as the purchaser of the shares being transferred. Instant Downloa Mail Paper Copy or Hard Copy Delivery, Start and Order Now! Transferring a commercial property into an SMSF can be a great way to build retirement savings and take advantage of the concessionally taxed SMSF environment.
But when acquiring property from a related party, it’s vital the property meets the “business real property” test. Make sure you know the essential elements of this test when exploring this strategy. Holding property in an SMSF can certainly have tax advantages.
He rolled his pension to the new SMSF and transferred real estate from his original SMSF to the new SMSF. If your SMSF purchases a commercial premises, it can be leased to a fund member for their business. However, it must be leased at the market rate and follow specific rules. SMSF property sales may have many fees and charges.
Importantly, business real property cannot include company title or shares in a company that solely owns the business property. It also does not include the business property’s furniture or non-fixtures. To transfer Commercial Property from your personal name to the name of the SMSF , you will need to execute a Contract of Sale and will need a solicitor to prepare the required documentation including lodging the transfer documents with the relevant State Revenue Office.
You will need to list the Purchaser of the Commercial Property as your SMSF. SMSF members doing this type of in specie transfer should contact a solicitor to draw up the paperwork and lodge the required documents with their State or Territory’s Revenue Office. One of the many advantages of a reversionary income stream is extra time to combine pensions under the transfer balance cap.