SMSF

Discussion in 'Superannuation, SMSF & Personal Insurance' started by May M, 7th Aug, 2014.

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  1. May M

    May M New Member

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    Hi everyone,
    wanted to know, if a SMSF can buy a block of land which is on two title ie 72 acres in total by spending 3/4 of the available fund ie no burrowing.
    We want to use this land for cattle , can we lease it to ourselves and are we able to build a house on one title with our money and live next to the farm
    many thanks
     
    May M, 7th Aug, 2014
    #1
  2. Terry_w

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

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    Yes this may be possible. You need to seek financial and legal advice about this/
     
    Terry_w, 8th Aug, 2014
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  3. Corey Batt

    Corey Batt Well-Known Member

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    Be careful with properties with multiple titles and the like within SMSF, there are specific rules which determine that SMSF property purchases cannot have the ability to be divided/developed - so there have been cases of funds being caught out for having properties which have the potential (even if not actioned).

    You will not be able to build a property on the land and then use it as your residence, there are specific rules on this. Get specific financial advice on this!
     
    Corey Batt, 12th Apr, 2016
    #3
  4. Redwood

    Redwood Well-Known Member

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    If you are buying with cash no issues with titles or single acquirable asset. You can do as you please.....pretty simple actually

    Cheers Ivan
     
    Redwood, 22nd Nov, 2016
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  5. Terry_w

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

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    Actually this may be possible
     
    Terry_w, 14th Dec, 2016
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  6. Simon Hampel

    Simon Hampel Founder Staff Member

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    Not very helpful @Terryw ... don't tease - details please! (Hey, that rhymes!)
     
    Simon Hampel, 15th Dec, 2016
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  7. Terry_w

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

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    I haven't researched it, but I read a paper buy a lawyer a while back about this. A Farm is business real property so it can be leased from the SMSF. Where there is a house it can be used by the members where it is incidental to the business.

    Seek legal advice before trying this.
     
    Terry_w, 15th Dec, 2016
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  8. Terry_w

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

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    See s 66(6) Sis Act
    SUPERANNUATION INDUSTRY (SUPERVISION) ACT 1993 - SECT 66 Acquisitions of certain assets from members of regulated superannuation funds prohibited
    Although this section is covering acquisition from a related party, ss 6 basically states that using a dwelling for private purposes where the area is not more than 2 hectares does not stop a property being business real property. But this only applies to the definition of ss5 of s66.

    See also the example 1 at paragraph 232 in SMSFR2009/1
    http://law.ato.gov.au/atolaw/view.htm?docid=SFR/SMSFR20091/NAT/ATO/00001
     
    Terry_w, 15th Dec, 2016
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  9. Simon Hampel

    Simon Hampel Founder Staff Member

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    Yes, I seem to recall reading about this too - but it's hardly an option for most people. Definitely something to consider if you're actually buying farming land!

    Actually, I wonder if there is a minimum definition of "farm" as a going concern?

    My parents own 5 acres which used to be a strawberry farm, not exactly commercially viable at that scale though - no doubt the ATO would consider that a "hobby farm" by some measure.
     
    Simon Hampel, 15th Dec, 2016
    #9
  10. Terry_w

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

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    It would probably need to be operating a business of farming - which may mean primary producer status. But it doesn't necessarily need to be large, just as long as the residential part if less than 5 acres.
     
    Terry_w, 15th Dec, 2016
    #10
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