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SMSF Investing

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Can a SMSF purchase and run a business such as sheep farming? That is buy the stock and lease land to run the stock on.

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ATO Certified

Moderator

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Hi @JAD101,

 

Thanks for posting.

 

As @Bruce4Tax mentioned, you can find information on our website about carrying on a business in your SMSF.

 

As the information we provide here is general in nature, you can request specific SMSF advice if you’d like us to provide advice as to how the super laws would apply to your SMSF. You may also want to seek independent professional advice.

 

Thanks, NicM.

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Devotee Registered Tax Practitioner

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Search for ATO reference QC 42474 about SMSF and business.

 

As I always used to tell my so:   "Just because you can do something, it does not meant that you should do it."

 

The SMSF can certainly own the land - as long as it meets the definition of "business real property."

 

I do not see how livestock in a fund would work.

 

Finally, a quote from an auditor:

 

Quick checklist

1. Will any specific SIS provisions be breached?
2. Could income be taxed as non-arm’s length income?
3. Has the sole purpose test been considered?
4. Is the business really a hobby?
5. What would an arm’s length reasonable trustee do?
6. Smell test…

 

Quoted from  an article by  Joel Curry, director, TriSuper Auditors

 

Best answer

ATO Certified

Moderator

Replies 0

Hi @JAD101,

 

Thanks for posting.

 

As @Bruce4Tax mentioned, you can find information on our website about carrying on a business in your SMSF.

 

As the information we provide here is general in nature, you can request specific SMSF advice if you’d like us to provide advice as to how the super laws would apply to your SMSF. You may also want to seek independent professional advice.

 

Thanks, NicM.

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