One common tip around the end of year tax time is to transfer assets from outside super into a Self-Managed Super Fund (SMSF). Those who own business real property or shares listed on ASX have the option of moving them into their SMSF.
This is a useful strategy to move the rental income from individuals to the SMSF. Whilst providing a tax deduction for the contribution.
The super funds tax rate of 15% ensures this strategy is very tax effective. Moving shares in to your SMSF is very easy and can be effective if your taxable income is very high.
Recent ATO rulings have set the ground rules about Business Real Property:
- The property must be individually owned, not by a company or trust.
- The business use test must be satisfied, the BRP must be used ‘wholly and exclusively’ in one or more businesses.
- Special rules apply to farmland, where up to 2 hectares can be used for a residence without prejudicing the definition of BRP.
It is vital to get our specialist Gold Coast Accountants advice on all SMSF strategies. Getting it right from the beginning will ensure all ATO and super fund rules are met.