Self-Managed Super Funds

For many business owners, the ability of an SMSF to acquire business real property can provide several potential benefits. Generally, an SMSF is unable to acquire an asset from a member or related party of the fund, but business real property is an exception to the rule.

Business real property consists of land or buildings used wholly and exclusively in running a business (whether carried on by a member of the SMSF or some other party). This would include shops, factories, offices etc.

Transferring business real property into an SMSF may be attractive for the following reasons: 

• To release capital back into the business or to the members directly (by selling the asset to the SMSF depending on ownership).
• To provide tax concessions on future investment earnings (net rental income and assessable capital gains are taxed at 15% in accumulation stage and zero in pension phase in super compared to marginal tax rates if held in the members’ personal names).
• To offer some bankruptcy protection
• Assets of an SMSF sold during the pension phase are exempt from CGT.