Scenario:
Found and industrial Property off the Plan to purchase (eg. total cost $250K) – NEW BUILD!Proposal:
Two Separate SMSF will each own 50.00% of the unit. (There will be a commercial lease at market rates)
Both personal SMSF have 2 members each and are individual trustees.Funding:
100% Cash purchase (50.00% each SMSF)
however looking to create it as a vehicle to unlock the equity and purchase more property via mortgages etc. Using the power of the lease income.
GST Liability of $25k bridging finance (3-6 months depending on filing dates) from SMSF till lodgement and refund from ATO. [so as not to change the controlling interest above 50.00%]Purchasing Structure:
From research is seems as though we would be best served as setting up a corporate trustee and unit trust that ultimately hold the property title?
Advantages: 50% CGT Rollover relief
Dis-advantages:The down side to this is we lose the depreciation on the building deduction (distributed to the SMSF)??Is this a good solution or am I missing something that will allow us better leverage and a better returning yield??
Obviously I don’t want to get caught regarding in-house assets etc. The magical wording seems to be controlling interest >50.01% by one party
This is something you need specific legal advice on.
A unit trust may be a good structure, but the trustees could also just buy as tenants in common – should always be a company trustee for SMSF I think.
Also consider having the SMSF borrow to acquire the property as once it is purchased it cannot be leveraged or mortgaged in the future.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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