-
Who is a ‘related party’ in an SMSF?
Posted on March 29th, 2017 No commentsSelf-managed super funds (SMSFs) have a number of investment restrictions which apply to transactions conducted within the fund.
One such restriction applies to transactions involving ‘related parties’ of the fund and ‘relatives of members.’
No one associated with the SMSF should obtain a present-day benefit from the fund’s investments. The fund needs to meet the ‘sole purpose test’ of providing death or retirement benefits to the SMSF members or their dependents.
A breach to the investment restrictions may result in significant penalties, such as the disqualification of a trustee and even prosecution.
The Tax Office considers a ‘related party’ as:
-
all members of the fund
-
associates of fund members, including:
– relatives of each member
– the business partners of each member
– any spouse or child of those business partners
– any company the member or their associates control or influence
– any trust the member or their associates control
-
standard employer-sponsors, which are employers who contribute to your super fund for the benefit of a member, under an arrangement between the employer and a trustee of the fund
-
associates of standard employer-sponsors, which include business partners and companies or trusts the employer controls (either alone or with their other associates) and companies and trusts that control the employer.
The ATO considers a ‘relative of a member’ as a parent, grandparent, brother, sister, uncle, aunt, nephew, niece, lineal descendant or adopted child of the member or their spouse; or a spouse of any individual specified previously.
Generally, SMSFs cannot borrow money and cannot buy assets from, or lend money to, fund members or other related parties (although there are exceptions to this rule).
Uncategorized -
- Answer our questions for your personalised Action Plan
- Client resources
- Complete your free Financial Health Check today!
- Privacy Policy
- TRUST login page
- Subscribe
- Welcome
- Finding sellers and buyers
- Applying for a loan
- Writing a business plan
- Evaluating the Business
- What we do
- The business plan
- Raising money
- Why choose us?
- Budgeting template
- Building a brand
- Presenting to the investor
- Good employee relations
- Pricing Strategies
- How to get your loan approved
- Legal formalities
- Setting up shop
- Loan checklist
- ‘Insuring’ your bright future
- Managing your money
- Sample business plan
- Growing your business
- Business news
- Firm news
- Business calendar
- Developing your business
- Financial management
- Latest News
- Useful links
- Client Log In
- Contact us
- Disclaimer
- Advantages of borrowing
- Types of loans
- Security
- The loan agreement
- The loan proposal
- Loan application
- Benchmarking
- Improving your business plan
- Better financial control
- Clever marketing strategies
- Cash Flow Projections
- Avoiding bad debts
- Better financial control
- Avoiding the Cash Flow Crunch
- Receivables & payables
- Inventory financing
- Trimming Overhead Costs
- Getting started
- Doing your research
- Making the decision
- Financing the purchase
- Pricing the company
- Negotiation
- Making and evaluating offers
- Closing the transaction
- New customers
- New orders
- Credit period
- Collection policy
- Setting a goal
- Personal life cycle
- Where to begin
- Putting it all together
- Work your plan
- Retirement
- Staying on track
- Setting goals
- Before you begin
- A word about tax
- Business life cycle
- Putting it all together
- Planning for retirement
- Exiting your business
- Starting with a dream
- Planning for profit
- Time for expansion
- Preparing for exit
- At last – retirement!
- The business hierarchy
- Business plan
- Financial plan
- Personal problems
- Conflict resolution
- Choosing a successor
- Planning for the future
- What is a Budget?
- The Budget Equation
- Constructing your budget
- Your retirement income