mixing superannuation and personal income

Viewing 6 posts - 1 through 6 (of 6 total)

wade anthony
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@wade-anthony
Join Date: 2007
Post Count: 53
August 2, 2011 - 3:30 pm
Is it possible to mix superannuation and personal income?
ie. if you purchased a vacant block of land through super and then use personal borrowings to fund the building of the property, would this work and if so how? Would there be any benefit? Would it be to complicated and not worth going there?
Scott No Mates
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@scott-no-mates
Join Date: 2005
Post Count: 3,856
August 2, 2011 - 10:50 pm
you may need specialist advice on that because smsf generally cannot get into speculative development works.
Jacqui Middleton
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@jacm
Join Date: 2009
Post Count: 2,539
August 2, 2011 - 11:17 pm
As Scott says, you'll need advice on that. Richard Taylor (userid Qlds007) on this forum would know.
I believe you will find you definitely cannot "borrow" to do the build.
If you can't work as an individual together with your super fund, you might be able to get around it by something like this: Super fund owns land, and a company owned by you and for which you are the director, builds on the land…
Talk to Richard.
Jacqui Middleton | Middleton Buyers Advocates
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Terryw
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Join Date: 2001
Post Count: 16,213
August 3, 2011 - 12:24 am
Yes it is possible.
You could personally lend the SMSF the money.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Jarrod Rogers CPA
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@jarrod-rogers-cpa
Join Date: 2011
Post Count: 8
August 3, 2011 - 1:23 pm
A good website on this would be SMSF Academy. An ex-boss of mine Aaron Dunn runs it. (I have no finanical ties to him, but his content and blog are very good.)
To answer a small part of your question, yes it would be complicated! There are not just tax rules but super rules to consider. You need to do things scrictly by the book and at arms length.
Richard Taylor
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@qlds007
Join Date: 2003
Post Count: 12,024
August 4, 2011 - 7:02 am
Agree with Terry nothing to stop you personally lending funds to the Bare Trust which undertakes the construction.
Underaking a development is a bit out there and if considered as running a business or trading will be an issue but otherwise all good.
Unfortunately you wont find any lender finance a Bare Trust in construction or indeed lend against vacant land.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender