| Related party transactions of SMSFs under review |
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The Australian Taxation Office (ATO) is warning Self-managed Superannuation Funds (SMSF) trustees to be careful about people offering to set up an agreement between their SMSF and a related party to purchase assets, particularly properties.
These arrangements may breach the in-house asset rules that the SMSF must follow to be considered a complying Super Fund.
These arrangements use a paid third party to setup an agreement (sometimes referred to as ‘a joint venture agreement’) between the fund and a related trust to purchase an asset that provides income for the Trust and the Fund.
The ATO believes that these arrangements are an attempt to circumvent the in-house asset rules, as the related party transaction is really an investment in the related trust by the SMSF.
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