SMSF to purchase my IP?

[Wazza007]

Howdy

Im looking at setting up a SMSF - I would have enough funds to purchase outright our current IP. Is this allowable for a SMSF to purchase property from one of the trustees at the current market valuation?

 

[geoffw]

I'm not sure if it is possible- but is it advisable?

At this stage in the cycle especially, there are investments which would probably give you a far better rate of return. The share market is going strongly at the moment- experts are saying that it has some time to run yet- and some good funds are available - for instance, this share fund which returned 17% in the last six months.

 

[see_change]

Howdy

Im looking at setting up a SMSF - I would have enough funds to purchase outright our current IP. Is this allowable for a SMSF to purchase property from one of the trustees at the current market valuation?

You can't purchase an IP of yourself into a SMSF unless it's your place of business. Not sure about if it's in a trust but an educated guess would be that it's ok to do so .

Onething to think about is that you loose the gearing advantages of property in a SMSF as you can't have a mortgage on anything that is owned or part owned by a SMSF.

One thing you can do, is have you SMSF buy part of a property , and keep the bit you own outright in your name ( that's assuming you have a mortgage on it ).

See Change

 

[geoffw]

You can't purchase an IP of yourself into a SMSF unless it's your place of business. Not sure about if it's in a trust but an educated guess would be that it's ok to do so .

Seech

I though that that only applied to borrowing- and that it was OK to buy a property outright?

 

[duncan_m]

Howdy

Im looking at setting up a SMSF - I would have enough funds to purchase outright our current IP. Is this allowable for a SMSF to purchase property from one of the trustees at the current market valuation?

Even if this could be done.. it would trigger a Capital Gains Tax event which might be costly?

 

[Dragons]

I have looked at this recently since I set up my own SMSF and according to booklets I obtained from the tax office the super fund cannot purchase a property from the trustees, even with market valuations. Unless it is a commercial property and it is deemed as your business.

There is a lot of information available on the ATO website regarding this.

I did purchase two blocks of land that have the potential to be developed later. That's allowed.

 

[Wazza007]

Thanks for the responses again all great information I always forget about CGT triggers, I did find further info on the ATO site - here is the link for anyone else who may be interested in SMSF.

http://www.ato.gov.au/super/content.asp?doc=/content/19109.htm

Im going ahead with the SMSF but I want to steer clear of shares until after the next correction,

 

[XBenX]

One thing you can do, is have you SMSF buy part of a property , and keep the bit you own outright in your name ( that's assuming you have a mortgage on it ).

See Change

My understanding (which involves no self interest - so take it as it comes) was that unless a debt existed prior to the changes in 1999? a SMSF cannot own any asset that has a debt attached to it (whether the debt is in the funds name or not).

Anyone wanna read the legislation again?

 

[Sultan of Swing]

I have looked at this recently since I set up my own SMSF and according to booklets I obtained from the tax office the super fund cannot purchase a property from the trustees, even with market valuations. Unless it is a commercial property and it is deemed as your business.

Can a trustee give or gift a property to their SMSF?