Ferguson Cannon Self Managed Superannuation Funds

SMSF and Your Business

Borrowing to Purchase your Business Premises

The Superannuation Industry (Supervision) Act 1993 (SIS Act) allows a number of investment concessions enabling SMSF’s to enter into transactions with related parties of the fund (members, relatives etc.), where those transactions involve ‘business real property’.

Business real property’ has recently been defined in a draft ruling by the commissioner of taxation. An asset is considered a business real property if the following four steps are satisfied:

The entity to whom the concept of business real property is applied to is correctly identified.
The property is considered ‘real property’, defined as land and any other attached buildings or fixtures.
The relevant entity has an eligible interest in the property such as a freehold or leasehold.
The real property is used wholly and exclusively in one or more businesses.

This concession essentially allows an SMSF member to own their business premises and pay rent to themselves. The transactions between the SMSF and the business must be at arm’s length and on commercial terms. The following diagram demonstrates the transactions involved:

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The team at Ferguson Cannon Lawyers can provide innovative and constructive advice regarding all aspects of Self-Managed Superannuation Fund borrowing and investment. We are happy and able to facilitate the transferral of your business property into your Superfund and any other required transactions.

Please contact Byron Cannon or Sam Barber on (07) 5443 6600 or by email:

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