Many investors are still unaware that rather than liquidating assets to transfer cash before the June 30 deadline, trustees of self managed super funds (SMSFs) can acquire transfer assets which are wholly and exclusively used for business purposes, according to Centric Wealth technical research manager Anne-Marie Esler.
Generally trustees are barred from intentionally acquiring assets from a related party of the SMSF including investment properties; however, they are able to use up to 100 per cent of the fund's assets to acquire "business real property" at the market value from a related party.
Farmers, for example, will able to place up to $1 million of land into their SMSF, in place of cash, if they use it for ongoing business and the house and garden of the owner or manager does not exceed two hectares.
"As long as it is a business real property they can transfer their asset from their own name to their SMSF," Esler said.
According to Esler, there are some capital gains tax (CGT) implications and possibly stamp duty costs.
"However, the upfront tax needs to be weighed up with a discounted CGT payable when the assets are eventually sold within the super fund," Esler said.
"It is also worth noting that the property cannot be encumbered and that the trustees should consider the asset in terms of diversification of fund assets and the liquidity of the fund as a whole."
From July 1 new limits on contributions will restrict the value of assets that can be transferred to a SMSF.
