Hi I hope your collective experience and knowledge can help! We have a SMSF that owns farmland, approx 40 hectares. It has plantation trees on it as a business but we bought it with nothing else - i.e. no sheds/buildings etc. Over the years, members of our immediate family have slowly set themselves up on it. Initially they would visit the 'farm' to ensure everything was ok when we weren't in town. However they started to park their caravan on it. Then came a shed. A new tractor housed in the shed. And now another shed setup with a small kitchen, storage etc. They also often leave their caravan there with the sheds for months at a time. It is a small section of the overall land but in the prime area of the whole block. They always wanted to be weekend farmers, and are using our land as their dream. They have never paid or contributed a cent. Obviously we are concerned with these developments and aren't in a position to directly ask them to leave (off our land !!!!) as it would cause no end of family drama... I am also sure that this directly contravenes SMSF fund laws and this concerns me the most. I am looking for help to see if anyone has had a similar situation, or what part of the superannuation law we could use to 'get them off', or any advice anyone might have. Ultimately we'd like them off, I just can't find the legal precedence or SMSF rule that we can use to make this happen. Really appreciate any advice. Many thanks!
Hi ShinyStuff, Sorry if I have offended in some way, have I misconstrued what type of advice I can get from this board? My apologies, but I am certainly no troll. And the query is a very real one, as preposterous as it may sound! Just frustrated beyond words and don't know where to turn. Would be grateful for any advice. Thanks...
I think you should get advice from the Tax Department Accurate,concise and from the horses mouth. Only fair-Right? REDBACK
This one is real simple from a legal point of view. Having family use the property like this is against SMSF law, and it's you who is responsible for that. I do not know off-hand the penalties are if you are caught, but you are fully legally responsible for this and are knowingly letting it continue. There is essentially no "law" that will "get them off", it's up to you to convince them that this is illegal and it's your arse they are putting on the line by being there. Either that or you get the authorities involved. Your choice.
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It depends on whether it's 'camping' or something more permanent? I'd be inclined to turn a blind eye to it, unless there's some real harm being done. It could be a lot worse.
ok, so i will take it seriously then.... roll eyes. this is not advice, just my opinion and I am often wrong, so please ignore me. 1) Compliance is the only thing that you should be concerned about with your SMSF. 2) if they were paying market rent, you will be fine. 3) As they are benefitting from your investment without paying for itas they are squatting, you ar now not compliant. 4) You will now be taxed at 50% (effectively) on your super. 5) You will lose compliance. 6) you will have to kick them off anyway when you are forced to sell. 7) Just kick them off now. 8) While you are at it tell them that they have no honour and that you are better off without them. 9) Send them a notice that they are tresspassing. 10) Send them an invoice that rent is $1000 per day, starting in 7 calendar days time. 11) Send them notice that if not all possessions are removed they will be billed for rubbish removal at $500 per tonne. Shiny.
Are they actually costing you any money, or are you just feeling bitter because you paid money for the land and someone else is enjoying it? If it were me...life's too short to be pissed at them. If they're not in your way, not damaging anything and not costing you money or preventing your from making money and booting them off would cause a rift in the family, just let it go. That said, explain to them that since the land is owned by your SMSF you have to do things properly: - A written contract for them to act as "caretakers" of the land - Any structures that are built by them must conform to relevant building codes, - Any structures that are built become the property of the SMSF (free improvements for you), - Property must be maintained and kept in good order I'm not sure what "market rent" would be for a piece of farm land that's only really suitable for camping, but you could make it $1 annual rent if you need to show that money changes hands and value their labor in-kind at whatever you like. If there's an sense of jealousy that they're "living the dream" (and you're not), it's really not going to do you any good. You bought the land for the plantation timber, but if someone can get some extra value out of it that you can't, be happy that the land can produce two good outcomes. FWIW, I saw something similar recently: guy approaches landowner, says "I don't have much money, but if you give me some of this unused land, I'll build something and we'll split the income from renting it". Land owner said "Sure you can use it, but pay me rent". The guy said "I can afford to build, but not the rent". No deal, nobody made any money and the land is still sitting there, vacant.
No, the only way you can have either yourself or relatives make use of SMSF property is to rent it out to a Pty Ltd business at market rates. If you are an individual or sole trader then that's not allowed.
Hi Everyone, Can't thank you all enough for the sage advice and suggestions - I will look into the Sole purpose test but I too was very much under the impression that this 'squatting' is illegal and opens us up to consequences i don't need, so we will be doing everything we can to rectify it. Thanks for all the replies, your list Shinystuff is very helpful, and luckily Willrocks the squatting isn't quite that bad but maybe in a few years if we leave it unchecked? eeeeek! Thanks Big A.D - maybe part of it is a bit of indignation that we have been put into this situation without really being asked, it has just evolved and now I am genuinely worried about the legal ramifications, which is why I will be doing what we can to comply. It was meant to be our retirement dream not someone elses! I will try and post an outcome once I have been able sorted it out. Again many thanks for the trust and advice! Cheers.
