Granny Flat build using super cash

[Coconutwheels]

G'day All,

Got a question here on behalf of my parents, hopping someone might be able to point us in the right direction.

Basically they own an investment property in their personal Names (both names), suitable for a granny flat. They are looking for cash flow increase, are debt free and done accumulating.

They have a fair amount of cash available in their Self Managed Super Fund. They are wondering if that money can be used/nvested to build a granny flat on the investment property in their personal names?

Cheers,

Ben

Ben

 

[Coconutwheels]

Or could they move the prop into their super fund?

 

[chilliblue]

Granny flats cannot be sub divided so my answer would be no.

 

[DaveM]

No. Its not an arms length transaction

 

[Shaneelastic]

Or could they move the prop into their super fund?

no they cant

 

[Shaneelastic]

G'day All,

Got a question here on behalf of my parents, hopping someone might be able to point us in the right direction.

Basically they own an investment property in their personal Names (both names), suitable for a granny flat. They are looking for cash flow increase, are debt free and done accumulating.

They have a fair amount of cash available in their Self Managed Super Fund. They are wondering if that money can be used/nvested to build a granny flat on the investment property in their personal names?

Cheers,

Ben

Ben

no, think of another investment other than this property

 

[Coconutwheels]

Ok, thanks for the replys guys

 

[monalisa]

Are your parents over 60 or reached preservation age, and retired? Might be able to commence a pension and withdraw some of the cash for the build.

 

[Shaneelastic]

Are your parents over 60 or reached preservation age, and retired? Might be able to commence a pension and withdraw some of the cash for the build.

So if they are over 60, earnings inside the fund are tax free, no cgt going forward.

Pull it out, earnings at MTR, and a CGT asset down the track.

 

[Coconutwheels]

Are your parents over 60 or reached preservation age, and retired? Might be able to commence a pension and withdraw some of the cash for the build.

I think their pension from super is about to start, I'll ask. They don't won't to borrow money again...ever, so were wanting cover entire cost from super money.

I think we might just have to find something better for them to invest the super money in. They had planned to get some use themselves from the flat, but seems it's a no goer.

Cheers,
Ben

 

[geoffw]

I had heard once upon a time about a SMSF doing a joint venture, which was in the context of renovating a property, where the person bought a property and there was a JV between the person and the SMSF for the SMSF to provide the funds, with commercial interest payable, to renovate the property.

Would that scenario work in this case?

 

[Marty McDonald]

No guru on this but believe it would not pass the various tests, ie no construction, no related party transactions.

 

[geoffw]

There's something about SMSFs and joint ventures here

It's something which appears fraught with danger though. There are a lot of things which could go wrong and break the rules- even if it could apply to the scenario in this thread.