super and can you do this

[grossreal]

hi all
this is very different but can you do it.
the new super rules allow you to put 1 mil into super up to july next year.
so can you loc your investment (your company owns) to 1mil
throw that into super as a super contribution.
then lend the supers 1mil back to your company as a loan and invest the money.
taking 1mil off or out of your structure and into super and anyone got abetter way of using this 1mil sunset super fro my understanding this window is only until july next year so you need to plan know.
whats your views.

 

[sailor]

I didn't know my SMSF could lend money to my company? This is food for thought.

 

[grossreal]

hi sailor
depending on the super it can lend but can't borrow it must be arms lenght transaction and must have are turn and if you use companies
then it lending to a company

 

[duncan_m]

then lend the supers 1mil back to your company as a loan and invest the money.

I believe you're wrong.. a SMSF can only invest 5% of its assets into a scheme/company/property/asset that is related to one of the scheme members..

So unless you've got a $20Million super fund what you've suggested may not be possible..

I could be wrong though.. would love to hear from Dale, CoastyMike, Mry etc..

 

[grossreal]

hi duncan
what if it lent the 5% to cover the interest component of the loan. then straight out invested the rest as a normal super fund.

 

[duncan_m]

hi duncan
what if it lent the 5% to cover the interest component of the loan. then straight out invested the rest as a normal super fund.

Sorry, I'm not competent to answer that question.

 

[grossreal]

hi all
the other twist is if the property that you were loc against was acommercial not residential property does this then allow 100% for the super to lend to the company
if that company invests in commercial property.
I can pass this past a couple of people woundering the views here.

 

[XBenX]

Dunc is most certainly on the money regarding the full million. See the ATO deputy's comments here.

http://www.somersoft.com/forums/showpost.php?p=249229&postcount=16

The specifics for his reasoning can be found in the MSG - along with the answer to the 5% interest component (cant remember the specifics of the legislation, your advisor can help with this)

 

[grossreal]

hi XBenX
if its commercial property doesn't that take it into the business real property area.
as per that last paragraph of the ruling and if its spread across commercial properties is this something to have alook at just getting information at this stage .

 

[Qlds007]

In-house assets are often confused with acquiring an asset from a related party. It is important to make the distinction between the two.

In-house assets are generally investments in or loans to a related party or leases between the superannuation fund and a related party of the fund. This is in contrast to the acquisition rules, where the suparannuation fund is acquiring the asset from a related party.

A self managed superannuation fund is permitted to hold in-house assets however the fund is limited in the amount of the in-house assets it can hold. The limit is 5% of the value of the assets of the fund.

The only exemptions from the In-House rules are:

1) A life Policy
2) A Deposit with an ADI or non ADI
3) An invt in a pooled superanuation Trust.
4) An invt in a widely held Unit Trust.
5) A property owned by the Super Fund and a related party as Tenants in Common.

 

[XBenX]

hi XBenX
if its commercial property doesn't that take it into the business real property area.
as per that last paragraph of the ruling and if its spread across commercial properties is this something to have alook at just getting information at this stage .

Hi GR,

The SIS Act defines business real property as:

"business real property" , in relation to an entity, means:

(a) any freehold or leasehold interest of the entity in real property; or

(b) any interest of the entity in Crown land, other than a leasehold interest, being an interest that is capable of assignment or transfer; or

(c) if another class of interest in relation to real property is prescribed by the regulations for the purposes of this paragraph—any interest belonging to that class that is held by the entity;

where the real property is used wholly and exclusively in one or more businesses (whether carried on by the entity or not), but does not include any interest held in the capacity of beneficiary of a trust estate.


http://bar.austlii.edu.au/au/legis/cth/consol_act/sia1993473/s66.html

Regards,

XBenX

 

[XBenX]

This thread provides a well constructed answer with answers.

http://www.aussielegal.com.au/imperator/SuperOutSourceF2/forum/forum_posts.asp?TID=1340

As opposed to my hack job above =)