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SMSF investment in a partnership

Discussion in 'Superannuation, SMSF & Personal Insurance' started by T_Muller, 15th Jul, 2015.

  1. T_Muller

    T_Muller New Member

    Joined:
    15th Jul, 2015
    Posts:
    2
    Location:
    Queensland
    Hi all,

    I have family members that have a business which operates as a partnership (50% each to Partners A and B). Partner A requires capital for another venture, and is hoping to sell 10% equity to a related party (to keep the business "in the family").

    Unfortunately Partner B doesn't have enough cash, but does have funds available in SMSF - however the related party rules would generally seem to exclude this option. The exception is for 'real property', and the difinition of which includes "any leasehold interest in real property". As the business/partnership has a 10 year lease of the building from which they operate, would this satisfy the exception?

    Further, the funds available to Partner B are not sufficient to provide Partner A with the funds they seek. Is it possible for another related party (potentially Partner C) to use the same exception to introduce funds from their SMSF as well?

    The challenge would then seem to be that the original arrangement is a partnership (rather than a company or trust), and as such there is no option for their SMSF's to purchase shares.

    So I assume that even if the related party exceptions can be addressed, that the partnership agreement would need to be redrawn, and that there may be stamp duty and CGT considerations?

    Appreciate your thoughts on the matter...
     
  2. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    This is very hairy. Too many issues, best to steer clear.
     
  3. T_Muller

    T_Muller New Member

    Joined:
    15th Jul, 2015
    Posts:
    2
    Location:
    Queensland
    Thanks for taking the time to reply Terry.

    I'm really hoping to (legally) help someone out of a jam. Appreciate any and all feedback.