Hi ATO Community,
I have a question about transferring a domestic investment property into an SMSF. My in-laws are 65 years old and they own two properties: a principal residence and an investment property. Both properties are debt-free and they have owned them for more than 10 years. The investment property is a residential unit that is currently rented out.
They are thinking of setting up an SMSF and transferring the investment property into it. They want to do this because they believe it will provide them with tax benefits and more control over their retirement savings.
I have done some research online and I found that there are some rules and restrictions for transferring property into an SMSF, such as the sole purpose test, the related party rule, the borrowing conditions, and the tax and duty implications. However, I am not sure how these rules apply to their situation and what are the pros and cons of doing this.
Can anyone please advise me on this matter? Is it possible and advisable to transfer a domestic investment property into an SMSF? What are the steps and costs involved? What are the risks and benefits?
I appreciate any help or guidance you can provide. Thank you very much.
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