Opinions on my situation

My other question right now is:

1. My SMSF borrowed 100% of purchase price of property plus conveyancing plus stamp duty from me.

What is the optimum repayment schedule to me. Should it just repay principal and low interest back to me? The rationale is that if the SMSF repays high interest to me, then I have to pay 47% tax.

Also, I need to leave money in SMSF to pay strata fees and council rates. The SMSF is receiving $550 per week rent from me which is standard market rate.

I would be grateful for your opinion on the SMSF repayment schedule to me.
 
My other question right now is:

1. My SMSF borrowed 100% of purchase price of property plus conveyancing plus stamp duty from me.

What is the optimum repayment schedule to me. Should it just repay principal and low interest back to me? The rationale is that if the SMSF repays high interest to me, then I have to pay 47% tax.

Also, I need to leave money in SMSF to pay strata fees and council rates. The SMSF is receiving $550 per week rent from me which is standard market rate.

I would be grateful for your opinion on the SMSF repayment schedule to me.

Surely the terms of your loan to your SMSF would already be in writing? Hasn't it settled already? could this transfer be counted as a contribution instead of a loan? What are the tax consequences? Would it be a commercial arrangement to lend a third party money without a written loan agreement in place?

Better get this sorted out asap.

Is there a written lease in place? Is it commercial in its terms?
 
Surely the terms of your loan to your SMSF would already be in writing? Hasn't it settled already? could this transfer be counted as a contribution instead of a loan? What are the tax consequences? Would it be a commercial arrangement to lend a third party money without a written loan agreement in place?

Better get this sorted out asap.

Is there a written lease in place? Is it commercial in its terms?

I can get a commercial property lawyer to write up the lease. But who writes up the terms of the loan?
 
Security cameras have been installed in the main waiting area - employees are not happy. I have consulted my lawyers and they will get back to me.

I'm worried about this bit too. It was suggested that the law says you must get employee permission and give notice. But you've installed first bad only just now waiting for legal opinion. In fact it looks as if you have advice given on a number of matters which you haven't followed up on.

Yes you have been busy but now that it's all been set up you should have some time left to fix up a whole heap of things.
 
And does every small business owner in this country seek legal advice prior to installing cameras in the public areas of their shop?
No. But any small business owner who is not at least aware of the law can leave themselves open to problems later.

When we took over our business I was not aware of the plethora of laws which cover the workplace and employment. There's laws on workplace health and safety, employee pay and conditions, privacy, surveillance, superannuation, immigration to name a few. Being in the food industry, we were very much under scrutiny as the industry has a bad name- so it was even more important to ensure that we did everything by the book as much as we knew how- and even that wasn't enough. We have had the workplace ombudsman do random checks, as well as the workplace health and safety people, and of course the food safety people. (The ombudsman found problems in our paperwork which cost us a lot to fix, but we were allowed to go back and fix. The WPHS people found problems which needed to be fixed, but told us that our standard was the best of any food place in the shopping mall. The food safety people didn't find problems. Unless the breeches are serious, they are very helpful in allowing things to be fixed).

If you have missed any super payment, an employee has the right to complain to the authorities, which could open yourself to an audit.

You have obligations to providing full information to employees about their pay, which includes the prompt issuing of payslips, and the keeping of records for a period of time, securely and privately. Privacy covers the secure recording of employment information as well as video surveillance. To have private employee information available over a network may be a problem for instance, as may be unsealed payslips. There are many areas where a workplace has the potential to be deemed unsafe. There are fire regulations. You may even leave yourself open to risk if an employee leaves milk in the fridge for too long. Perhaps you need to have a trained first aid person or to have a fully stocked first aid kit- which may not be applicable for a medical type practice. But perhaps your kind of practice requires more stringent than normal standards.

With today's emphasis on workplace bullying and discrimination you may be required to show that you have educated employees in these matters- and that you are aware how to handle any such problems legally.

I guess any employer has a number of actions.
1. Ignore potential problems. Obviously I wouldn't advocate this in a public forum, even if I did think it was a good idea! But There's probably a lot of employers who get away with a lot of things just because nobody has ever checked them. A small workplace may have a low risk of being assessed by any authority, or to have a disgruntled employee complain about problems.
2. Read up on the laws and try to comply. China, in your case, it would seem that this is not a strength- and to keep up with all laws may be a big job.
3. Get a third party. This doesn't have to be a lawyer. There are firms which can do workplace audits, which can cover as many or as few areas as you wish to have checked. It may be a good insurance policy, cutting down your chances of being audited or even sued at a later date.
 
China, looks like a big can of worms.

In addition to Terry's leading questions, who is the owner of this property? Is it purely your SMSF? Or have you set up a custodian trust to hold the property title in it's mortgaged state?

You need advice post haste. If your lawyer and accountant haven't crossed the t's and dotted the i's for you, I fear that might have issues trying to rectify this retrospectively. Your SMSF could end up being non complying.

Terry (as always) has offered some very valuable input here. Perhaps you should seek his professional input in the case your providers have been less than prudent. He is based in Sydney just like you are.

Good luck.
 
I'm worried about this bit too. It was suggested that the law says you must get employee permission and give notice. But you've installed first bad only just now waiting for legal opinion. In fact it looks as if you have advice given on a number of matters which you haven't followed up on.

Yes you have been busy but now that it's all been set up you should have some time left to fix up a whole heap of things.

I have installed cameras but they have been disconnected from electricity. So they are not functional. Just two pieces of plastic in the ceiling. Surely this cannot be a breach of surveillance policy. They will not become functional until lawyers have been consulted.
 
China, looks like a big can of worms.

In addition to Terry's leading questions, who is the owner of this property? Is it purely your SMSF? Or have you set up a custodian trust to hold the property title in it's mortgaged state?

You need advice post haste. If your lawyer and accountant haven't crossed the t's and dotted the i's for you, I fear that might have issues trying to rectify this retrospectively. Your SMSF could end up being non complying.

Terry (as always) has offered some very valuable input here. Perhaps you should seek his professional input in the case your providers have been less than prudent. He is based in Sydney just like you are.

Good luck.

The SMSF is the owner of the property. The SMSF is a trust. What is the added benefit of a custodian trust?
 
Consult with your employees as well. According to my reading of the legislation they need to be given 14 days notice and they need to approve. Let them know it is in their interest. If you had a patient who got a bit upset they would want that recorded to ensure they don't get blamed. The surveillance works both ways.
 
The SMSF is the owner of the property. The SMSF is a trust. What is the added benefit of a custodian trust?

China, respectfully, you don't know what you don't know. If your providers (lawyer and accountant) were informed that your intent was for the SMSF to leverage and purchase this property the appropriate structures (and ownership documentation on the contract of sale) would be in place.

If I have it correct you have loaned money direct to your SMSF without any formal loan documentation (or even a minute or resolution)? Is there an investment strategy that documents the SMSF's objectives and potential for this exercise you have undertaken?

The custodian trust (or bare trust) holds this property in trust for the SMSF when the IP is under mortgage. It also needs to have a corporate trustee (a company that has never traded or ever will trade in its role as trustee) and it should be different to the corporate trustee of the SMSF. To achieve the borrowing required for the SMSF to acquire investment property, these items must be addressed before purchase. All lenders require this. The fact that you have loaned funds to the SMSF shouldn't change this, otherwise I fear your cash input into your SMSF wasn't a loan, but could be construed as a contribution..............ergo the cash injection could be trapped and implicate contribution excess thresholds being breached............

I am no expert but know enough to urge you to seek advice promptly.
 
China, respectfully, you don't know what you don't know. If your providers (lawyer and accountant) were informed that your intent was for the SMSF to leverage and purchase this property the appropriate structures (and ownership documentation on the contract of sale) would be in place.

If I have it correct you have loaned money direct to your SMSF without any formal loan documentation (or even a minute or resolution)? Is there an investment strategy that documents the SMSF's objectives and potential for this exercise you have undertaken?

The custodian trust (or bare trust) holds this property in trust for the SMSF when the IP is under mortgage. It also needs to have a corporate trustee (a company that has never traded or ever will trade in its role as trustee) and it should be different to the corporate trustee of the SMSF. To achieve the borrowing required for the SMSF to acquire investment property, these items must be addressed before purchase. All lenders require this. The fact that you have loaned funds to the SMSF shouldn't change this, otherwise I fear your cash input into your SMSF wasn't a loan, but could be construed as a contribution..............ergo the cash injection could be trapped and implicate contribution excess thresholds being breached............

.

I recognise the term bare trust and have the structure you have described in place.

However, I do not have loan documents, no documented strategy and no documented objectives.
 
Consult with your employees as well. According to my reading of the legislation they need to be given 14 days notice and they need to approve. Let them know it is in their interest. If you had a patient who got a bit upset they would want that recorded to ensure they don't get blamed. The surveillance works both ways.

Do the employees have to approve? I thought that the employee's only course of action if they disapprove of surveillance after I have properly informed them is to resign. Otherwise no workplace could ever install cameras, think banks, small shops, shopping centres - with thousands of employees.

Personally, I have good reason to install security cameras. There is large public thoroughfare through my premises. There is nothing filmed except for what should be considered normal behaviour for a public area. Large amounts of cash flow through my reception area - there are security concerns. However, my staff think that I have installed the cameras are there to monitor them and accuse me of lack of trust. Hence I have consulted my lawyers.
 
China have you even read what has been posted? I posted a link which summarises the NSW Act which is http://www.findlaw.com.au/articles/390/surveillance-in-the-work-place.aspx
The Act establishes the distinction between covert video surveillance and open video surveillance. It is a breach of the Act for an employer to carry out open video surveillance if the following has not occurred:
At least 14 days notice has been given to employees of surveillance.
The majority of employees have agreed to the video surveillance.
Warning signs are placed in the workplace indicating that video cameras are in use.
Video cameras are visible.
With respect to covert video surveillance:
Employers must receive authority from a magistrate before they can carry out covert surveillance and it must be solely for the purpose of establishing whether or not an employee is involved in any unlawful activity. A magistrate must be satisfied that there are reasonable grounds to suspect the employee is engaged in unlawful activity.
The surveillance operation must be overseen by a licensed security operator and all tapes other than those required for evidence must be destroyed after three months.
Correctional centres, the casino and law enforcement agencies are exempt from the legislation.

Somebody else suggested that you check out the surveillance act itself- what I had posted was just an interpretation. So look at www.austlii.edu.au/au/legis/nsw/consol_act/wsa2005245/ and check out section 10.

Repeatedly you have been given advice on a number of matters- some of it by well qualified lawyers, and repeatedly you have chosen to ignore it and go your own way. Your SMSF is a mess, your loan hasn't been properly done and you risk getting sued by your employees for breaking the law. I shudder to think what your employment systems are like- I imagine it's a real mess.

You have argued in the past that employment rules are onerous- yet the example you have given, that of firing employees, is one thing I have found to be not very onerous, easy to follow and fair to employees. There is a lot more out there which is a lot harder to get right. From what you've said I would be surprised if you are aware of a lot of your more onerous responsibilities. If you don't get that right you leave yourself open to a lot of problems. Just installing cameras without talking with your employees leaves yourself open to mistrust. If you had talked with them before you would have had them on your side- now they are dead against you, and may be able to veto the system.
 
Btw. Employees can work with you. They aren't enemies. Work with them and they can be very valuable to you and do a lot of good for your business. Work against them and things can get difficult for you.
 
China have you even read what has been posted? I posted a link which summarises the NSW Act which is http://www.findlaw.com.au/articles/390/surveillance-in-the-work-place.aspx


Somebody else suggested that you check out the surveillance act itself- what I had posted was just an interpretation. So look at www.austlii.edu.au/au/legis/nsw/consol_act/wsa2005245/ and check out section 10.

I have looked at this legislation a few times since it has been brought to my attention on this thread. My interpretation of it is that if I give notification as specified in Section 10 of the Workplace surveillance Act, then even if the employee objects, I can legally proceed to activate my security cameras within 14 days. Is this your interpretation?
 
The way I read it. You need the majority of staff to approve the surveillance.

But who cares what our interpretation is. Who cares what your interpretation is. We (most of us) aren't lawyers. You are not a lawyer. Seek professional legal advice before your employees do. Make sure your I's are dotted and t's crossed. Maybe you are right and have nothing to worry about, but maybe not.

A small fee now is far cheaper than the potential outcome.

The potential cost of trying to unravel your current smsf issue should be all the experience you need.

Blacky
 
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