SMSF IP purchase from family
- Thread starter agent007
- Start date
If it fits the definition of 'business real property' it would be possible.
Funds are prohibited from acquiring property from members or associates of member. You might want to look up the definition of associate here, but I think it includes close family members.
But there is an exception for 'business real property'. IN some cases residential property can qualify - but not usually. The ATO has a ruling out on their interpretation of what business real property is, so you might want to look at that too.
But there is an exception for 'business real property'. IN some cases residential property can qualify - but not usually. The ATO has a ruling out on their interpretation of what business real property is, so you might want to look at that too.
Yep, can not do residential property as "father/brother/sister of the member" come under the definition of related party and you can not purchase a residential property from a related party.
Looks like Boarding houses can be classified as 'business real property'. ?
I am wondering if it is possible to sell them to SMSF if they are under a family trust currently ?
http://www.ato.gov.au/superfunds/content.aspx?doc=/content/00138072.htm
What connection is required between property use and business?
Once it is established that the relevant entity holds an eligible interest in real property, that interest can only be business real property if the underlying land satisfies the business use test.
The business use test requires the real property be used wholly and exclusively in one or more businesses, whether or not that business or those businesses are carried on by the relevant entity.
The character of the real property's use determines whether the business use test is satisfied. A holistic assessment, which takes into account all the facts and circumstances relating to the use of the property, is applied to work out whether the test is satisfied.
The subject of the business use test is the underlying land, rather than any interest held by the relevant entity in the real property that may become business real property on applying the definition. The use of the land itself must be considered.
For these purposes, use of the property refers to any activities, operations or actions occurring on the land in question. Any and all such use of the property must meet the requirement under the business use test that the real property is used 'wholly and exclusively in one or more businesses'. Land upon which activities, operations or actions occur can be contrasted with land that is idle or dormant and is therefore not being used.
Under the business use test, use of the land is more easily connected with a business where the business itself is the user of the land.
However, use of the land can also be connected with a business carried on by an entity that allows use of the land even if the activities, operations or actions occurring do not inherently have a business character. In these cases, the business to which the use of the land is connected is a property investment business under which rights to use the land are granted to others (often by way of lease).
The final Ruling covers a wide range of circumstances that fall within the definition and provides a large number of examples to assist you in understanding the practical application of the concessions. These examples include:
primary production business with private residence
primary production business - annual crops
primary production business with multiple dwellings
poultry farm used in a primary production business - unused paddocks
incidental use of the poultry farm
temporary agistment on otherwise vacant land
vacant land
water licence (not an eligible interest in real property)
fishing licence (not an eligible interest in real property)
leasehold interest in real property with non-severable interest in an afforestation arrangement attached
letting holiday flats - no business
residential property held in a property investment business
agency - no relevant business use
motel with manager's residence
bed and breakfast - existence of a business
strata-titled hotel complex
management company
doctor's surgery in residential premises
shop co-located with an uninhabitable residence
mechanic - home garage
inner-city design studio used in a business
storage of personal items
shares in a company that owns business real property
units in a unit trust - not an eligible interest in real property
commercial units held under company title
instalment warrant over real property
lease of commercial retail premises
indoor market
substance over form in determining the nature of an interest in real property
sublease
assigned lease
land development.
I am wondering if it is possible to sell them to SMSF if they are under a family trust currently ?
http://www.ato.gov.au/superfunds/content.aspx?doc=/content/00138072.htm
What connection is required between property use and business?
Once it is established that the relevant entity holds an eligible interest in real property, that interest can only be business real property if the underlying land satisfies the business use test.
The business use test requires the real property be used wholly and exclusively in one or more businesses, whether or not that business or those businesses are carried on by the relevant entity.
The character of the real property's use determines whether the business use test is satisfied. A holistic assessment, which takes into account all the facts and circumstances relating to the use of the property, is applied to work out whether the test is satisfied.
The subject of the business use test is the underlying land, rather than any interest held by the relevant entity in the real property that may become business real property on applying the definition. The use of the land itself must be considered.
For these purposes, use of the property refers to any activities, operations or actions occurring on the land in question. Any and all such use of the property must meet the requirement under the business use test that the real property is used 'wholly and exclusively in one or more businesses'. Land upon which activities, operations or actions occur can be contrasted with land that is idle or dormant and is therefore not being used.
Under the business use test, use of the land is more easily connected with a business where the business itself is the user of the land.
However, use of the land can also be connected with a business carried on by an entity that allows use of the land even if the activities, operations or actions occurring do not inherently have a business character. In these cases, the business to which the use of the land is connected is a property investment business under which rights to use the land are granted to others (often by way of lease).
The final Ruling covers a wide range of circumstances that fall within the definition and provides a large number of examples to assist you in understanding the practical application of the concessions. These examples include:
primary production business with private residence
primary production business - annual crops
primary production business with multiple dwellings
poultry farm used in a primary production business - unused paddocks
incidental use of the poultry farm
temporary agistment on otherwise vacant land
vacant land
water licence (not an eligible interest in real property)
fishing licence (not an eligible interest in real property)
leasehold interest in real property with non-severable interest in an afforestation arrangement attached
letting holiday flats - no business
residential property held in a property investment business
agency - no relevant business use
motel with manager's residence
bed and breakfast - existence of a business
strata-titled hotel complex
management company
doctor's surgery in residential premises
shop co-located with an uninhabitable residence
mechanic - home garage
inner-city design studio used in a business
storage of personal items
shares in a company that owns business real property
units in a unit trust - not an eligible interest in real property
commercial units held under company title
instalment warrant over real property
lease of commercial retail premises
indoor market
substance over form in determining the nature of an interest in real property
sublease
assigned lease
land development.
Soyabean,
primary production with multiple residences means a farm with several dwellings ie primary producer
primary production with multiple residences means a farm with several dwellings ie primary producer
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