SMSF ( Self Managed Super Fund )

[rollie]

Hi everyone,
I need some advices re issue around SMSF.
I am in the process of setting up my SMSF with intention to invest in residential properties. My financial planner advised me that it would take about 6-8 weeks to get the structures setup , then roll over the funds to my SMSF and then I can proceed with borrowing and buying properties .
However, rightnow I am negociating to buy a residential property , but my financial adviser said I need to wait until the SMSF structure completely setup and ready to go.
Q: Can I proceed to buy now and sign the contract of sale , put my name +/- nominee on it with delayed settlement date ( say 3-4 months >> well after the SMSF completely setup ) , then on settlement , I will nominate the corp trustee of the SMSF to complete the settlement/transaction >> so the property will be under SMSF

Regards
Rollie

 

[Aaron_C]

If you add the nominee clause then you should be fine to do so. What has your solicitor advised?

 

[Rolf Latham]

Hi everyone,
I need some advices re issue around SMSF.
I am in the process of setting up my SMSF with intention to invest in residential properties. My financial planner advised me that it would take about 6-8 weeks to get the structures setup , then roll over the funds to my SMSF and then I can proceed with borrowing and buying properties .
However, rightnow I am negociating to buy a residential property , but my financial adviser said I need to wait until the SMSF structure completely setup and ready to go.
Q: Can I proceed to buy now and sign the contract of sale , put my name +/- nominee on it with delayed settlement date ( say 3-4 months >> well after the SMSF completely setup ) , then on settlement , I will nominate the corp trustee of the SMSF to complete the settlement/transaction >> so the property will be under SMSF

Regards
Rollie

Hi Rollie

Best to have the copr trustee and bare trust set up before u sign a contract.

The actual creation of these things is quick, its getting the cash out of the existing funds thats the delay

ta

rolf

 

[rollie]

Thanks guys for your reponses.
I did email to my lawyer re above issue >> had no reply over last 5 days>> still lying on the beach somewhere in Bali ?
Q: how long will it normally take to roll funds over to SMSF from the existing industry funds ?
Cheers
Rollie

 

[Aaron_C]

Normally rollover doesn't take that long. Maybe a few weeks. The thing I would be concerned about is getting the finance organised. 3 months would be a minimum I would say.

 

[rollie]

That is quite interesting indeed. Is there any particular reasons for taking longer to get finance for SMSF compare to normal investment loans to individuals ? Are all the big banks same for this matter or if anyone know which one is better in your experience?
Cheers
Rollie

 

[Rolf Latham]

That is quite interesting indeed. Is there any particular reasons for taking longer to get finance for SMSF compare to normal investment loans to individuals ? Are all the big banks same for this matter or if anyone know which one is better in your experience?
Cheers
Rollie

Finance timing per se isnt the issue........we can get the settled in 4 to 6 weeks

BUT

if you dont have seed fund in your SMSF its tough to get formal approval

Our business likes both St George and ING Wholesale for resi SMSF

ta

rolf

 

[Aaron_C]

That is quite interesting indeed. Is there any particular reasons for taking longer to get finance for SMSF compare to normal investment loans to individuals ? Are all the big banks same for this matter or if anyone know which one is better in your experience?
Cheers
Rollie

The reason is there is more paperwork involved, more lawyers, which means more TIME. Think of the possible (common) scenario:

1. Your lawyers/financial advisor drafts up the SMSF / bare trust deed for you.
2. You apply for the loan, send all the deeds etc to the bank's lawyers.
3. They take 1 week to look it over, and come back with concerns about certain terms, provisions etc. Don't forget that each trust deed must accord not only with the SIS Act, but the lender's policy as well. Each lender is different, as you would expect.
4. Your lawyer/financial advisor takes 1-2 weeks to make the amendments, which you then send to the bank who take another 1 week to review it.
5. Bank approves the loan, takes its usual 2-3 days to issue docs and arrange settlement.

With so many steps in the process, it is very easy for things to get out of hand. Especially when some lawyers get a bit shitty when they are asked to change their deed. They always say 'oh I have never heard of this before blah blah blah'. Get as much time as possible, for your own sake.

 

[rollie]

Time will be an issue for my case as you guys pointed out precisely.
Either :
1/ further negociate to get prolonged settlement ( which is unlikely because the vendor does not like this >> but at least will have a shot at it )
2/ if finance issue with the bank not get thru prior to settlement >> I can use my own fund/cash >> Q : can I lend my own fund to my SMSF , another words >> can my SMSF borrow directly from me ?
Cheers
Rollie

 

[Rolf Latham]

Especially when some lawyers get a bit shitty when they are asked to change their deed. They always say 'oh I have never heard of this before blah blah blah'. Get as much time as possible, for your own sake.

awwwwwwww precious folk arent they

sometimes though, the lenders do request some common sense amendments

ta
rlf

 

[Terry_w]

2/ if finance issue with the bank not get thru prior to settlement >> I can use my own fund/cash >> Q : can I lend my own fund to my SMSF , another words >> can my SMSF borrow directly from me ?
Cheers
Rollie

Yes, a SMSF can borrow from a member. Seek specific advice tho.

 

[MikeF]

Hi everyone,

Q: Can I proceed to buy now and sign the contract of sale , put my name +/- nominee on it with delayed settlement date ( say 3-4 months >> well after the SMSF completely setup ) , then on settlement , I will nominate the corp trustee of the SMSF to complete the settlement/transaction >> so the property will be under SMSF

Regards
Rollie

Another reason NOT to do anything until you get all your structure in place is that the ATO may possibly see the deposit that you have paid (I'm assumming you will pay from own funds and then get back from the SMSF later) as a super contribution and therefore may take you over the annual super contributions limit for members.

 

[rollie]

Hi everyone,
What a fantastic reponse and many thanks for sharing your advice over last few days from this forum.
I also want to share with you guys the advice I got from my solicitor ( after he return from Bali and did not respond to my email 2 weeks ago !!! ) re these issues :

I quote : " The money/fund used to purchase propety or asset MUST come from SMSF 's bank account including deposit paid on the property.
The stamp duty may apply when the property is later transferred to the SMSF, if the trustee has not paid all the initial purchase price of the property/asset "

I quote : " The holding trustee 's name must appear on the purchase document, because the holding trustee is the purchaser to the property, i.e the contract of sale is between the seller and the holding trustee"

Well, the above had set some lights to my issues mentioned a few days ago.

Anyway, I did manage to negotiate with the vendor to hold on the property abit longer W/O sign any contract of sale until SMSF setup and fund roll over from the existing fund >> then COS signed and exchanged with deposit fund will be drawn from SMSF 's bank account.

Cheers
Rollie

 

[Savanna100]

Selling my trust deed

I'm thinking of selling my trust deed online (for, say $47). I have been using it for the last 10 years and had no trouble with the regulators. I would like to sell it as part of a website that helps people exit work by replacing their income in various ways (website not launched yet) and the deed would be offered as "something that worked for me but you must seek your own advice and set up your own investment strategy"
If you knew what you were doing and were given basic advice on filling in the few blanks in the deed, for a simple straightforward SMSF, if works fine for me. The ATO recognises it, the Australian Public Service pays my super into it and it gets successfully audited ever year with no problems.

I am aware of the regulation about giving financial advice and think that I would not be giving any. I'd merely be saying "this is what I use, seek your own advice"

I'd be interested in your views, thanks

 

[Terry_w]

I'm thinking of selling my trust deed online (for, say $47). I have been using it for the last 10 years and had no trouble with the regulators. I would like to sell it as part of a website that helps people exit work by replacing their income in various ways (website not launched yet) and the deed would be offered as "something that worked for me but you must seek your own advice and set up your own investment strategy"
If you knew what you were doing and were given basic advice on filling in the few blanks in the deed, for a simple straightforward SMSF, if works fine for me. The ATO recognises it, the Australian Public Service pays my super into it and it gets successfully audited ever year with no problems.

I am aware of the regulation about giving financial advice and think that I would not be giving any. I'd merely be saying "this is what I use, seek your own advice"

I'd be interested in your views, thanks

Did you prepare the deed? ie draft it?

And are you a 'lawyer'?

 

[Savanna100]

I have had the deed for 10 years and used it. I am admitted as a solitior but dont practice law. The original deed was prepared by a lawyer but I now hold the copyright.

 

[Terry_w]

I have had the deed for 10 years and used it. I am admitted as a solitior but dont practice law. The original deed was prepared by a lawyer but I now hold the copyright.

Then you could be ok, but you would need to make sure the deed is up to date as there have been heaps of changes to trusts in the past few years. Definition of income etc. If it is a SMSF deed then even more changes - such as the ability to borrow.

 

[lizzie]

Normally rollover doesn't take that long. Maybe a few weeks. The thing I would be concerned about is getting the finance organised. 3 months would be a minimum I would say.

Can take significantly longer - as we found out.

Companies are legally allowed to pay super up to 3 months past the due date ... hence you can't close your old super (if that is your tactic) until the payments are up to date.

It took 10 weeks after setup to get ours rolled.

 

[Jtkumnick]

I'm thinking of selling my trust deed online (for, say $47). I have been using it for the last 10 years and had no trouble with the regulators. I would like to sell it as part of a website that helps people exit work by replacing their income in various ways (website not launched yet) and the deed would be offered as "something that worked for me but you must seek your own advice and set up your own investment strategy"
If you knew what you were doing and were given basic advice on filling in the few blanks in the deed, for a simple straightforward SMSF, if works fine for me. The ATO recognises it, the Australian Public Service pays my super into it and it gets successfully audited ever year with no problems.

I am aware of the regulation about giving financial advice and think that I would not be giving any. I'd merely be saying "this is what I use, seek your own advice"

I'd be interested in your views, thanks

I think its a great idea and kudos on your deed- HOWEVER I think selling it would be a legal minefield, and at $47 a pop i think you would be opening yourself up for incredible litigation potential and trouble with AFSL...
There is a website called cleardocs.com.au or something like that that already does this, but it is done by a law firm....

Its ok using a deed for yourself but when you start selling it, its the equivalent of giving financial advice......

 

[Terry_w]

I think its a great idea and kudos on your deed- HOWEVER I think selling it would be a legal minefield, and at $47 a pop i think you would be opening yourself up for incredible litigation potential and trouble with AFSL...
There is a website called cleardocs.com.au or something like that that already does this, but it is done by a law firm....

Its ok using a deed for yourself but when you start selling it, its the equivalent of giving financial advice......

I am pretty sure Cleardocs isn't a law firm and cannot provide legal advice. But their documents are prepared by a law firm.

But I agree that it will be a legal minefield and impossible to sell an old deed without it being virtually rewritten.

No AFSL issues unless financial advice is provided with the deed.