Benefits of selling to SMSF

Hi All

This is my scenario I am developing soon and will own the 3 villas outright in my Trust

I have heard it is a good move to sell to my SMSF? How does this work? Is it even true

I think it would be a bad move if I have to pay stamp duty again

Thanks

 

is it in a discretionary trust ? if so you probably won't be able to

 

Thanks Mike

yes its a discretionary trust

 

If a developer the properties could meet the definition of business real property even if residential if trading stock so could potentially be possible

 

A isolated profit making transaction may not meet the requirements for business real property and a SMSF ruling would be best obtained to avoid a breach of s66 SIS if its not clear. Yes duty and tax etc are all triggered. There are many ways to effect a transfer through inspecie contributions etc and a upfront purchase isnt necessarily required Sale by instalments with our with a SMSF LBRA may even be a strategy. However the cashflow impacts do need to be planned.

 

Thanks everything

seems forward planning required

Main aim is to reduce tax

 

Whether you sell to a related SMSF or the public it is really the same tax outcome for the seller. Same with the purchaser - whether the SMSF buys from a related party or a stranger it is the same outcome. Perhaps there could be some agent fees saved though

 

The sole strategies for reducing tax are:

1. Dont sell. Retain and hold on capital account if that was the original intention. If you had planned sale retention wont alter this but can defer the tax indefinately. Potential depreciation etc ? Issue for a disc trust is whether it has positive taxable income. Otherwise losses accumulate. But can be used in future years.

2. Margin scheme ? re GST savings. GST savings then are taxed so its a bit of a false saving