From today's SMSF Alert on Property – SMH Money 06/12/2012
Just a few poignant words of warning when putting property into your SMSF.
I can't believe the things people do! But it happens. One accountant told me one of his clients purchased a residential house in his SMSF and moved into it!. Accountant refused to have anything to do with him after that.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Sounds like a very appropriate response from the accountant!
Yes i totally agree however sometimes it is not always the clients fault.
Some of the advice i have seen been given from so called professional advisers.
Real Estate agents are one of the worst who advertise a property for development, strata etc and then put a note that the property would be ideal for a SMSF borrowing.
Scratch your head and wonder how these guys get away with it.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Totally agree with Richard, the advice from real estate agents in particular can be very damaging and costly to the client in the long run.
But the client also has to take some of the responsibility, for relying on the advice of a real estate agent in the first place.
I think as accountants we probably don't do a good enough job of telling people that if they mess something up – particularly in an SMSF – it can be costly to rectify. IF it can be rectified in the first place.
Attended a CPD training day yesterday which focussed on the 'recently' released Australian Consumer Legislation.
Interestingly the ACL comes into being, as a piece of legislation, as soon as an enquiry is made. A transaction does not have to be made.
The legislation is quite explicit about misleading advice and the penalties severe if found guilty. Some of the stuff I read coming out of some 'professionals' is appalling.
If people want specialist advice they should seek out a suitably qualified professional in the field and be prepared to pay for it.
I've come to the conclusion that very few professionals know what they are talking about. Including lawyers, doctors, hair dressers and travel agents.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I agree Terry should have seen the last haircut i got darn disgrace.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Terryw wrote:I've come to the conclusion that very few professionals know what they are talking about. Including lawyers, doctors, hair dressers and travel agents.Does that include the ones in Fortitude Valley, St Kilda or Kings Cross?
For any newbies here, and I am too, it is a fact that if you purchase a property within your SMSF you cannot live in it. Correct me if I am wrong —- But the only thing you can purchase in your SMSF that you can benefit from is artwork, you can purchase this and hang it in your own hallway provided that is the most logical and secure place for it. Anything else like this you can buy and benefit from?
theycallmeBruce wrote:Anything else like this you can buy and benefit from?I wouldn't recommend it for rare wines (hmm, I don't know why).
theycallmeBruce wrote:But the only thing you can purchase in your SMSF that you can benefit from is artwork, you can purchase this and hang it in your own hallway provided that is the most logical and secure place for it. Anything else like this you can buy and benefit from?
Another example of bad advice.
Cheers,
Rob
Gday Rob – you missed pasting my disclaimer so here it is again – Correct me if I am wrong…. Please do share so all can benefit, cheers Bruce
Bruce – this is def wrong. You cannot benefit from Artwork in your SMSF. It would have to be stored away from where you could look at it. Enjoying it would breach the sole purpose test – which is to provide for the retirement of the members, not the enjoyment before retirement.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Cheers for clarifying Terry. I could see this could be frustrating for investors who actually buy speculative artwork in SMSF as you would have to keep it under wraps and not view it until you are age 65 or deemed retired.
Have recently setup a SMSF, and received ATO document NAT 11032 'Running a Self-Managed Super Fund' and it clearly outlines what the role and responsibilities are as a trustee. Here are some of the warnings mentioned on Page 15, which I found funny
- If your SMS buys art, generally you cannot use it privately
- Don't Buy Wine as an SMSF investment and then drink it
- Don't buy jewellery as an SMSF investment and then wear it
Thanks for further clarification Wong
Do send a link thru if doc available online? cheersYou don't just have to sit on artwork (metaphorically speaking) and store it in a dark room, there are a few avenues to lease it to companies who will 'rent' your artworks or place them in an art library/art bank (or whatever they call them) and then lease them on short or long term to corporate/private clients. Providing you don't use them, this is fine.
Next thing we will be hearing that a SMSF can invest in a luxury car such as a Bugatti Veron and use it on weekends only as long as you clean before it goes back.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Same rules probably apply Richard, you can’tbe getting a benefit from the investment – it still needs to get driven to the service centre or petrol station though.
Do send a link thru if doc available online? cheersYou must be logged in to reply to this topic. If you don't have an account, you can register here.
