A self-managed superannuation fund is a core component in many private business structures. Such funds are regulated by the Superannuation Industry (Supervision) Act 1993 which contains complex rules limiting the forms of investments and transactions that may be entered into by a self-managed superannuation fund.
Our superannuation team is recognized with leading expertise in understanding the complex rules that affect investments by self-managed superannuation funds.
Particular areas of concern when considering investment choice as a self managed superannuation funds are the prohibition against acquisitions from related parties, in-house assets, borrowing restrictions and limitations on superannuation contributions. The superannuation team has significant expertise in those areas.
When most advisers are looking at investment options for self managed superannuation funds they mainly focus on direct investment and installment warrants (limited recourse borrowing arrangements). There are various other options, depending upon the particular client circumstances, that can often be utilized.
We can assist in the following areas:
- establishing self managed superannuation funds and amendments to superannuation deeds;
- advice and options on the restriction against acquisitions from related parties and restrictions against borrowing;
- advice and options in respect of the application of the investment rules, with particular focus on the in-house asset rules;
- residency rules applying to trustees and super funds; and
- general rules and framework of the SIS legislation.
Our recent work in this area includes:
- mining client: Advice on whether dividends received by a self-managed superannuation fund from a private company constituted non-arm’s-length income (which would be taxed at the top marginal rate);
- farming client: Restructuring of super fund assets into a trust without the obligation of stamp duty (by taking advantage of a little known exception under the Queensland stamp duty legislation);
- advice on and implementation of limited recourse borrowing arrangement (also called installment warrant) to allow borrowing by the superannuation fund for a proposed acquisition; and
- use of unrelated trusts where the clients wished to purchase business premises and later make improvements.