SMSF Investing in Cattle can it be done

Discussion in 'Superannuation, SMSF & Personal Insurance' started by Pauline__, 1st Oct, 2017.

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  1. Pauline__

    Pauline__ New Member

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    Australia
    Hi this is my first post.

    Just wondering if anyone has invested in cattle with there SMSF.

    We have grown up on the land and have just joined the realm of SMSF. We would like to invest some of our cash - trading cattle.

    We have the land to to put the cattle on and fatten and resell them every 6 months. For us this is a sure investment of a fairly good return in a sort amount of time.
     
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  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    possible in theory, but never heard of it happening. You would need to avoid Non-arms length income (NALI) happening or 45% tax
     
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  3. Rakhi Withanage

    Rakhi Withanage Member

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    Adelaide, SA
    Hi Pauline,

    There is nothing specifically prohibiting this however, it would need to meet all of the normal SMSF rules. (related party transactions, arm’s length etc etc). Then the people looking after the livestock would need to be compensated for their time (otherwise it may be considered a super contribution).

    Would a simpler transaction be for the SMSF to buy the primary production land from you and then you personally buy cattle and lease the land from your SMSF? Possible CGT or stamp duty implications depending on where land is located.


    I would suggest getting specific personal advice for this one.
     
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  4. SMSFCoach

    SMSFCoach Member

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    Castle Hill, Sydney, Australia
    I agree with Rakhi that this is very complex. You say you have the land and feed already but does the SMSF own these or you personally. The SMSF cannot acquire assets from a related party so leasing the land off yourself to breed the cattle or buying the feed from you will cause issues. Much easier to own the farm in the SMSF and lease back to yourself and you fund the cattle and farm costs.
     

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