All Topics / Help Needed! / SMSF and trust.

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  • Profile photo of RocksquadRocksquad
    Participant
    @rocksquad
    Join Date: 2010
    Post Count: 6

    Hi Everyone,      Sraight to the point..  We want to set up a unit trust that is half owned by a SMSF(my buisness partner) and the other half owned by an individual  (me)   Can someone point me in the right direction for  a lender that that is not bamboozaled or scared of this set up..   On a house.. 280k in Qld….      We live in Brisbane….              Thank you for any help….     Jef…

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi Jef

    Hate to say you wont find any lender touch such a deal with a barge pole.

    The SMSF will be a Unit holder and will need to be a party to the loan.
     
    Under SISA it cannot do so.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    Profile photo of PISTOREPISTORE
    Member
    @pistore
    Join Date: 2012
    Post Count: 75

    We have a great contact here in Sydney who is one of the leaders in setting up SMSF's.
    I know this post is old, but there has been a lot of changes in attitudes by Banks towards these and you can set up an SMSF and buy an investment property quite easily now.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Anthony not an old post was raised on 21 Feb 2012.

    Yes we set up a lot of SMSF here in Brisbane where the poster comes from but it still cant be done.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of EPI_DenEPI_Den
    Member
    @epi_den
    Join Date: 2010
    Post Count: 71

    Hi Rocksquad,

    I doubt that this can be done, but we’re about to interview a SMSF expert on one of our podcasts. I’ll ask him if he knows anyone and let you know.

    Cheers,
    Den

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Possibly a unit trust and a SMSF could buy a property as joint tenants.

    But a SMSF could not buy units in a unit trust if it was a related party. These would be deemd in-house assets – actually a SMSF could prbbably invest up to 5% of its value in an in-house asset.

    But there would be further restrictions such as the unit trust would be unable to mortgage the trust's property.

    see also reg 13.22C SISR.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of RocksquadRocksquad
    Participant
    @rocksquad
    Join Date: 2010
    Post Count: 6

    Thanx guys for replying..     It would seem thats all come to a complete dead end… 
    But tell me this?

    If the property is bought wholely and solely by my business partners SMSF, Which obviously can be done..   Is there any problems with us buying it off the SF with a joint unit trust, some time after settlement…?       We both have an equal share in the trust…?
    What are your thoughts…..?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    You would be related parties – so can a smsf sell to a related party? I am not sure off hte top of my head. A SMSF cannot acquire but don't know about sell.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of ksherwellksherwell
    Member
    @ksherwell
    Join Date: 2007
    Post Count: 125

    There shouuldn’t be a problem with the UT purchasing the property from the SMSF. However, it would need be conducted on a commercial basis and to satisfy the super legislation the investments made by SMSFs must be made and maintained on a strict commercial basis, so the fund trustee must ensure the asset valuation is robust and the purchase or sale price of the SMSF asset must reflect its true market value.

    My understanding is that the ATO states you must obtain an independent valuation report to determine the market value before purchasing the asset from the super fund. You must also ensure there is a written contract in place and that the terms of the contract are on commercial basis.

    The tax treatment of the proceeds of the sale will depend upon whether the SMSF is in accumulation or pension phase.

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