Won't say 'no' but Sole Purpose Test will rear its ugly head. You could provide an arrangement where you lease out the property to an at-arms-length party and receive 'market rate' compensation for it. Use your imagination about what you may be able to accomplish with liberal interpretations of 'at-arms-length' and 'market rate'.
Mate barsteds wanted $42000 stamp duty on $820000 criminals make bloody hard to get in front might stick to residential build the kitty back up
Private investment company I worked at the Chairman owned a vineyard in his superfund and his winery business held in his own name rented the land & operated a winery on it. We obviously had to be careful around getting valuations and ensuring the rent was at market, the superfund was a passive holder etc etc but we had no issues from Mr Taxman or the auditors. Was sold a few years ago so am unsure what rules have been changed around this in the meantime.
Problem with residential is your up for the rates and much of the outgoings on the property. If you purchased the farm using your super fund and then either you or someone else leases it at arms length and runs a business that is fine. The problem may be that the bank will only fund 65% of the purchase price and a commercial variable loan at the moment is around 7.65%. The cost involved of setting it up in the super fund would be $2000 for the bare trust, plus about another 2-$5000 in bank set up fees. The other issue is GST unless the property is already working as a viable farm then it is considered a going concern so no GST. If is just vacant land GST on the property will be charged but if your super fund corporate trustee is registered for GST then you can claim the $82,000 back. Kind Regards non recourse
Plan on selling a property to part fund it should have about 550k +150k super maybe put on 2 titels super buys the farm me the house cheese maker to rent big shed $12000 per year ,rent 2 bed aparment 10000 a year , lease land 21000 per year .me about 25000 per year property already running as a farm . eventualy breed cattle ,about 40000/60000k return bank is playing hardball thanks for your help Phil
You need to be very careful how you set up the loan. Don't just go to a family solicitor to set up the bare trust as the penalties of getting it wrong in super can see your super fund raped by the tax office. The banks do play hard ball with super and ordinarily demand that there is only 65% gearing. You can contribute up to $450,000 after tax dollars into your super as an undeducted contribution (that means it isn't taxed 15% when it goes in) but the other side of negative gearing in your super is your only taxed at 15% so the benefits not as great Kind Regards non recourse
In short yes.I have a producing farm in my SMSF that was leased to a large grower that went broke.As a result I took over the running of it by using sub contractors to do the machine work,planting and harvesting. I applied to the ATO 4 weeks ago for a private ruling on the matter of " running a business".They have responded saying that they can only give a private ruling in relation to a specific section of the act. They said that running a farm did not defer to a specific section of the act so they would not rule.They did say however it was fine as long as all payments to subbies are arms lenght. They also said that the sole purpose test was OK. I had my accountant and the ATO confirm the conversation in writing.
