SMSFs and Properties is a plain English guide to the superannuation law and how it applies to the acquisition of properties by SMSFs. This comprehensive guide covers what kinds of properties can be bought; from whom these properties can be bought from; the strategies which trustees can lawfully use to acquire properties; and, the CGT concessions on property available to small businesses. SMSFs and Properties is full of examples and it contains a comprehensive bibliography and index for those wishing to do further research.
Chapter 1: Introduction
Property investments within a Self Managed Superannuation Fund (SMSF) can be an effective way to increase an SMSF member’s retirement savings as well as provide tax effective investment returns. This chapter outlines the advantages and disadvantages of investing in property with an SMSF.
Chapter 2: Risks
Chapter Two examines the three risks that should be considered in any investment strategy.
Chapter 3: Definitions
SMSF trustees planning on investing in property should know how the property investment terminology is interpreted by the superannuation law. Chapter three shows how the law understands terms such as “maintain”, “repair”, and “improvement” as well as other specific legal terminology which applies to property investments.
Chapter 4: What types of properties can an SMSF invest in?
Chapter Four explains the “sole purpose test” and how it impacts on the sorts of properties SMSFs can invest in.
Chapter 5: Who can an SMSF purchase a property from?
SMSFs cannot buy property from just anyone. This chapter looks at who trustees can buy property from; the legal restrictions on related party transactions; and, who a related party is.
Chapter 6: How can an SMSF invest in properties?
SMSFs can use a number of different strategies to invest in property. Chapter Six examines borrowing, in-specie contributions, tenants-in-common arrangements, and using a related entity to acquire property.
Chapter 7: Property Dos and Don’ts
Chapter Seven outlines what SMSF trustees can and cannot do when investing in property. It answers the questions: Can an SMSF lease a property to a related party? Can an SMSF renovate, demolish, or construct a building on a property? Can an SMSF pay a member for work performed on the property? Can an SMSF pay a superannuation benefit by transferring a property to a member?
Chapter 8: Limited Recourse Borrowing Arrangements
Limited recourse borrowing arrangements can be complicated to implement and costly if structures incorrectly. This chapter outlines how to structure them correctly, who the SMSF can borrow from under the arrangement, and what kind of property is appropriate for a limited recourse borrowing arrangement.
Chapter 9: Small Business CGT Concessions
Many small business people also have an SMSF. Chapter Nine closely examines the CGT concessions available to small business people which can be put towards their SMSFs. CGT concessions such as the 15-year exemption, the 50% active asset reduction, the Retirement exemption, and the Roll-over exemption are outlined in plain English.