SMSF and unit trust for a medical clinic

Discussion in 'Accounting & Tax' started by XtraFL, 9th Aug, 2015.

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  1. Redwood

    Redwood Well-Known Member

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    Hi there- DBA will provide a 'rolls royce' service, they know their stuff, however, on many occasions their disclaimers mean their advice is useless. Be free to contact Jeremy Gordon, he completes the majority of Redwood advice, with full legal liability protection and generally more in depth than Gadens, Townsend, SMSF Law and DBA and at a competitive price.

    Cheers Ivan
     
  2. Terry_w

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

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    Legal Tip 39: And/or Nominee contracts and Asset protection https://propertychat.com.au/community/threads/legal-tip-39-and-or-nominee-contracts-and-asset-protection.2032/

    Legal Tip 5 And/or nominee and stamp duty issues https://propertychat.com.au/community/threads/legal-tip-5-and-or-nominee-and-stamp-duty-issues.389/
     
  3. Big Red

    Big Red Well-Known Member

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    Obviously if you are using a geared unit trust that is different to the SMSF borrowing using a bare trust. With the lenders I have dealt with most want to see an SOA. At the end of the day it comes back to risk who takes on the risk if the deal goes south. The SMSF is protected so the lenders recourse is limited.
     
  4. Terry_w

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

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    It depends. In something like this if there is a personal guarantee given by a SMSF trustee there will be no protection. Some people cannot get finance through and fail to tell the bank the unit holder is a SMSF trustee. This would be a breach of the SIS Act but I have heard of it happening.
     
  5. Paul@PAS

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

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    The posts that suggest that a SOA isn't needed may all be breaking laws. Providing advice on a SMSF borrowing etc may well be financial advice as a financial product is involved. The provider must hold a AFSL. They days of the accountant being allowed to discuss and recommend a strategy / structure involving borrowing is over. I often have clients ask how they can run these sorts of arrangements - Financial advice. But when they know the financial implications then others certainly can facilitate it.

    No different to terry's frequent mention of legal advice. Many lenders for a SMSF borrowing may also require a signoff that the members have obtained legal advice for that reason. The days of the forced disclosures seem to have dimmed but many lenders still expect some sign offs that acknowledge these risks
     
  6. Redwood

    Redwood Well-Known Member

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    Hi there,

    I acknowledge its confusing. Legal advice is different to a SOA. A SOA is not required - unless a financial product is recommended. Legal or tax advice is not financial advice under Corp Act, unless they are providing personal financial product advice - i.e product recommendation - you are advising on a structure, not recommending it. An SOA will not provide comfort that the structure satisfies Superannuation Law - so what is the point?

    A financial planner 'may' not provide legal advice or tax advice, I know where I would go as I said in my first post and the last person in the line would be a financial planner.

    Cheers Ivan
     
  7. Terry_w

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

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    A SMSF is a financial product so only a Fin Planner can recommend one be set up. Here we are ot talking about setting one up but a SMSF buying units in a trust - are units financial products? They would be if they are publically listed, but I am not sure if a private unit trust's units would.

    It is also a question of law - is it legally possible for a SMSF to buy units. I guess this is like someone asking is it possible for a trust to buy shares.

    The accountants exemption under the corporatations act and regs only allows limited advice on incidental aspects of a SMSF - an accountant cannot recommend one be set up or what it can invest in - I think.

    I am not sure what the answer for this one would be.
     
  8. Redwood

    Redwood Well-Known Member

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    Terry - Chartered Accountants can recommend the set up of a SMSF (not just a Financial Planner) and what else, so can "Joe Blow" - people can make their own choice (which ASIC and others can please recognise - WE ARE NOT ROBOTS) - something many do (i.e set up an SMSF) without the help of a financial planner or lawyer or accountant or spruiker or anyone. Esuper has 20,000 SMSFs and there are over 550,000 SMSFs in Australia overall - Esuper are not financial planners.

    The Accountants Exemption and requirement for Limited AFSL does not come in to 1 July 2016. For the answer - refer to my first post :).

    Cheers Ivan
     
  9. Terry_w

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

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    Ivan, I think you are correct - Reg 7.1.29 Corporations Regulations

    But a CA or CPA wouldn't be able to do much more in advice such as transfer funds from one superfund to another without an AFSL.
     
  10. Redwood

    Redwood Well-Known Member

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    Terry - we know each other well, its irrelevant, my point is as much as the law applies, people are not robots, they can make their own decision and choose who to engaged, as an experienced professional, based on the scenario above, the financial planner is the last person the OP would choose to advise, remembering he/she knows what they want, they just need advice on implementation.

    We move on at 50/50

    Cheers Ivan
     
  11. Terry_w

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

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    As a financial planner I agree Ivan!

    A lawyer should be the first point of call as a SMSF is a trust after all.
     
  12. Terry_w

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

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    Actually a mortgage broker should be the first point of call as there is no point in continuing with set ups etc if it won't be possible to get finance.
     
  13. Redwood

    Redwood Well-Known Member

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    Terry - as I say, I was responding to a financial planner imposing a SOA, post 14 includes a mortgage broker in the 'chain'- my first post, for any SMSF property investor I recommend a loan pre-approval to determine their borrowing power before they set up an SMSF to invest in property, they then CHOOSE to set up and SMSF (after they understand the risks and benefits of an SMSF) and go ahead, this one is a little different due to the structural issue, generic view, invest in property is quite simple - and follows a normal pattern of specialists involved. When it involves an SMSF, the person involved should know their SMSF back to front.

    No matter what, like the fella here, people do their due diligence before they proceed on a complex structure.

    Cheers again, Ivan
     
  14. Terry_w

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

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    Yes, fully agree.
     
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  15. XtraFL

    XtraFL Member

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    Hi Terry,

    So in Victoria if we put the property under contract under personal +/or nominee and later nominate to a newly set up unit trust, it will trigger double stamp duty?
     
  16. Terry_w

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

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    Yes, it could.
     
  17. XtraFL

    XtraFL Member

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    In this situation when a property is on the market, but to set up a unit trust is fairly costly and there is no guarantee that 1. vendor accepts offer, 2. finance can be sorted out, how do we proceed?
     
  18. Terry_w

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

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    Best to set up the structure first and arrange finance before making any offers.
     

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