Changes to SMSF As At June 2011
One common tip around the end of year tax time is to transfer assets from outside super into a self managed super fund(SMSF). Those who want to grow their super funds have the option of moving Business Real Property (BRP) into a SMSF, while only attracting a small stamp duty and little or no capital gains tax.
This might be useful if cash needs to be freed up to use as consideration of a transfer. It also avoids paying a high rent on business premises by buying the premises in a SMSF, and allows members to benefit personally from the high rental yield.
Be sure to first consider what a BRP is, given the recent ATO rulings:
The property must be individually owned, not by a company or trust.
The business use test must be satisfied, the BRP must be used ‘wholly and exclusively’ in One or more businesses.
Special rules apply to farmland, where up to 2 hectares can be used for a residence without prejudicing the definition of BRP.
There must be some element of physical use of the property, actions that are connected with its underlying business purpose.
It is vital to get advice to maximise tax savings before the end of June.
This article is for guidance only, and professional advice should be obtained before acting on any advice herein. Neither the publisher Leenane Templeton The Self Managed Super Specialists nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication. See “self managed super funds” website for further information. This article relates to Australia, NSW and does not take into account any legislative or other changes made after 1 April 2011.
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