Overseas tax treatment - SMSF

[Marbel]

Hey guys,

I am planning to get a property in America outright with the funds of my SMSF. Is it possible to recommend any SMSF specialist who knows all the implications behind this and has reasonable fees?.
Additionally, I need to confirm whether any income coming from the rent of that new property should go straight into my SMSF bank account? or this can go to my personal account (this does not make sense to me but someone suggested this to me a few years ago)

I tried to reach my accountant but he's now living overseas and not dealing anymore with these issues. That is the life I would probably want

Cheers to you all and have a great new year 2015

 

[Terry_w]

Hey guys,

I am planning to get a property in America outright with the funds of my SMSF. Is it possible to recommend any SMSF specialist who knows all the implications behind this and has reasonable fees?.
Additionally, I need to confirm whether any income coming from the rent of that new property should go straight into my SMSF bank account? or this can go to my personal account (this does not make sense to me but someone suggested this to me a few years ago)

I tried to reach my accountant but he's now living overseas and not dealing anymore with these issues. That is the life I would probably want

Cheers to you all and have a great new year 2015

What sort of advice do you need? If just tax then your tax agent may be able to help.

The question about depositing is a legal one and you would be committing a breach of trust if you put trust money into your personal account. You may also be breaching the SIS Act.


Any income earned overseas would be taxed in that country where it is generated. The fund may get a credit for tax paid overseas, but the fund is likely to be taxed more over there than here.

 

[coastymike]

You might have to establish a LLC with the SMSF holding the shares in the LLC. If this is the case just be aware that this will be an in-house asset and you will need to consider the in-house asset rules in particular 13.22C

 

[Redwood]

Good point coasty.

13.22c is usually ignored - reason being that promoters just want to sell the property and do not care about SMSF compliance. The fact is that many SMSFs that have invested in the USA are non compliant, let me state the following if you have a bank account with a non-approved ADI and the balance of the account is greater than 5% - you need to seek advice immediately. Unfortunately, there are a heap of SMSFs who are unaware of this, and before they join us I make them aware of this. For many, Wells Fargo is not on the list.....http://www.apra.gov.au/adi/pages/adilist.aspx

There are a number of considerations including legal ownership of the asset....i.e The LLC in the relevant state will own the property and the bank account will be in the LLC, but you need to satisfy s52 legal ownership, i.e how can you prove the SMSF owns the bank account and the property? Well, a Declaration of Trust comes in.

Important to be compliant and consider the information above.

Cheers and happy new year to all.

Ivan

 

[Paul@PFI]

Overseas property ownership is no different to aus property for a SMSF. A Reg 13.22 trust is one of many ways to structure matters. The key issue of title that satisfies the auditor will be paramount. Get advice and rely on a competent adviser and no issues should pop up.