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Generally, SMSFs cannot acquire assets from a related party.
But of course with exceptions, including:
a. Listed securities
b. Business Real Property
d. Investments in 13.22c Trust or Company
Can a SMSF acquire units from a related Unit Trust (UT) which has borrowings?
Since the UT has an outstanding borrowing, exception (d) above is not applicable.
So, exception (c) will apply.
I don't think the fact that the UT has borrowings has something to do with exception c?
Hence, the SMSF can purchase units from the related UT (geared) but just have to make sure that IHA rules are to be followed and complied with.
Can anyone confirm?
Thanks a lot.
Welcome to our Community.
The investment that you have outlined sounds like an in-house asset. We have information about in-house assets on our website if you want to have a read.
An in-house asset is:
Self-managed super funds are restricted from lending to, investing in or leasing to a related party.
There are some exceptions, including:
In-house assets can't be more than 5% of your fund’s total assets.
If you require further guidance, you are welcome to make a request for self-managed superannuation fund specific advice.
Hope this helps.