One solution to this is for SMSF to enter into an « agency contract » or « refund » with the customer in question, which stipulates that the customer does not purchase the equipment for himself (and therefore his assets), but on behalf of SMSF. Again, this needs to be created correctly, and you may still encounter the problem of « arm`s length » requirements. The act of the agency contract would transfer the terms of the agency to the agent and authorize the related party to purchase the goods and materials as an agent on behalf of the trustees. Can John and Mary use their brother-in-law, who is a builder, to do the development work? From a compliance perspective, it would be safer to hire companies that are not affiliated with the fund. However, where an affiliated entity is involved, SMSF`s relationship with the entity must be based on market conditions and appropriate documentation must be in place to support it. Before members or their family are hired for paid service, abide by the prohibition on granting financial benefits to members and/or other related parties, and make sure there are reasons to use their service and rate of pay. You must also ensure that the Fund does not acquire assets such as building materials from parties related to the Fund. If you are purchasing equipment for the project, make sure that the fund trustee is buying directly from third parties or seeking advice on an agency contract for the purchase of materials through related parties. Since the above list is not exhaustive and not suitable for all circumstances, we recommend that you seek formal advice before deciding on such an investment. Alternatively, the appointment of the Agency and the power of action conferred on the Agent could be expressed or implied in the construction contract. The appointment of an agent in this scenario would typically involve the SMSF trustee designating the related party as its agent under an agency contract or an amendment to the construction contract. Step 3 – Determine who will act as trustee of the naked trust The tax office states that it is acceptable for guarantees to be signed in connection with an SMSF loan agreement as long as the lender`s and guarantors` rights of recourse against the SMSF are limited to the acquired asset. As long as the buyer`s name is correctly noted in the purchase contract (see Who signs the contract to purchase the property? Question above), the naked trust deed you are using is properly prepared and the timing of the sequence of events is correct, no stamp duty should be levied if the naked trustee later transfers ownership of the SMSF.

Ancillary costs considered to be inextricably linked to the acquisition of the employable asset may also be included in the borrowing under the 2010 legislation. The examples provided for in the 2010 legislation (i.e. transfer fees, stamp duties, brokerage or credit facility fees) are expressly permitted by the credit agreement. SMSF concludes the one-piece contract with us by paying a deposit. We buy the land and commission the client to construct the building. Step 5 – Sign the contract on behalf of the naked trustee (or as required by your tax office) In SMSFR 2012/1, the ATO provides an example of adding a « grandmother`s apartment » to a property with an existing residence, subject to an SMSF loan agreement. This can be done on the basis that the property remains residential, but cannot be done with borrowed money. In other words, SMSF funds can be used. With packages of homes and land on the maps, you can build the perfect property for your investment strategy, whether residential or commercial.

Examples of collection of identical assets permitted under the 2010 Act (as outlined in the Explanatory Memorandum) include: The 2010 Act only allows you to replace the original asset in certain circumstances. Supplementing an existing property acquired under an SMSF loan agreement Related parties and independent parties may lend money to SMSF to facilitate an SMSF loan agreement. .