Property SMSF - different beneficiary ages?

Discussion in 'Superannuation, SMSF & Personal Insurance' started by housechopper2, 11th Jul, 2019.

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  1. housechopper2

    housechopper2 Well-Known Member

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    im thinking of setting up a joint SMSF with my wife but we have a 10 year age gap.

    When can we access the funds within the SMSF?

    Is is when the youngest person reaches the correct age? Or a mixture of both?

    How could we structure the fund in a way to ensure we are not disadvantaged by having different ages?
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    each person would have their own separate benefits and could only access that when a condition of release is met.
     
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  3. JohnPropChat

    JohnPropChat Well-Known Member

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    The rules for SMSF contribution and withdrawl, condition of release are the same as a any other super fund.

    You need structuring and strategy advice as to why you want an SMSF in the first place.
     
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  4. Scott No Mates

    Scott No Mates Well-Known Member

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    Get new ID's with different birth dates or get a younger partner.
     
  5. housechopper2

    housechopper2 Well-Known Member

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    Or older.
     
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  6. Simon Hampel

    Simon Hampel Founder Staff Member

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    This is part of the challenge of having large amounts of capital tied up in illiquid assets such as real estate in an SMSF.

    You must meet your obligations within the fund when it comes to paying benefits, so you need to have a plan for how you will make capital available to do so.

    If you have all your capital tied up in property, that's not necessarily going to be easy without selling assets you might not want to sell yet.

    This is one of those situations where I think professional advice is critical - they absolutely need to have a very clear idea about your circumstances, timeframes and goals, because this is going to get complex.

    It could be that property is the wrong asset class for your SMSF needs.
     
  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    The biggest issue with property is super is when someone dies. Death is a compulsory payment of death benefits which generally means the property would need to be sold. This eats into the assets of the SMSF with buy and sell costs. If the property is one being leased to a business of the member it can be disastrous.
     
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  8. JohnPropChat

    JohnPropChat Well-Known Member

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    If the Bare Trust that is holding the property is a unit trust, can units be transferred (in-specie) instead of cash payout?
     
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    a bare trust is not a unit trust. they are 2 different things.

    If a a SMSF has borrowed to acquire units in a unit trust these are assets that could be sold which could potentially mean they could be transferred out of the SMSF to a death benefit beneficiary.
     
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  10. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Geared property may pose a very poor choice for a fund approaching pension phases since at least 4% (and rising over time) must be paid. Then the issue with death can be fatal to a SMSF strategy and oblige the trustee to sell property to enable the death benefit to be cashed. There could be strategy to use a reversionary pension to avoid this but it will then be affected by the liquidity trap and more.

    Licensed financial advice should address these issues before reaching a decision on a smsf and property.
     

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