12:11PMMonday Apr 21st, 2014

New Rules To Affect SMSF Property Investments

selfmanagedsuperfundsSMSFscontinuetogrow92As self managed super funds (SMSFs) continue to grow, and their investment in property rises too, they must keep a close eye on changing policies.

In an article by Smart Money, it was revealed that new legislation was recently introduced in Federal Parliament. If passed, it would alter the superannuation laws and set guidelines for the acquisitions and disposals of some assets between SMSFs and members of the fund or their relatives.

The amendments came after Cooper Review made recommendations.

Under the new rules, a trustee of an SMSF would not acquire an asset from a related party, with the following exclusions:

  1. The asset is a “listed security” (share, bond etc.) acquired in an approved way.
  2. The asset is “business real property” of the connected party and a qualified independent body deemed it to be of market value.
  3. The asset is an investment in particular in-house assets acquired, a qualified independent body deemed it to be of market value and it would not mean the level of in-house assets of the fund are more than 5%.
  4. The trustees of an SMSF changed, resulting in acquiring the property.

Smart Company warned that the punishments for breaching the new rules would be severe. If the changes are passed, they will come into affect on July 1 this year.

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