grateful replied to the topic Improve a property in an SMSF – Compliance Issue in the forum Legal & Accounting 13 years, 11 months ago
Great post on your blog, thanks Evolve.This issue is so contentious, I've pretty much decided to buy off the plan instead, making sure the land and building are both in the one contract. Can't get into trouble that way.It's a shame really, however I can see the ATO's point, that adding value by using the fund's own money to improve the property…[Read more]
grateful replied to the topic Improve a property in an SMSF – Compliance Issue in the forum Legal & Accounting 14 years ago
Scott No Mates – you are right, it makes no sense. I guess that renovations may be construed as property development, which can be risky. The new rule hasn't been thought through, I feel.Evolve, thanks, I have spoken to more SMSF people, including a couple of lawyers, everyone has a different opinion. Some say it's perfectly fine to use n…[Read more]
grateful replied to the topic Improve a property in an SMSF – Compliance Issue in the forum Legal & Accounting 14 years ago
Wow, thanks LR, that gives me much more confidence about the improvement issues. There are replacement issues also, in Section 67a and b of the SIS act (and in the Explanatory Memorandum) that don't make sense commercially ie an asset cannot be replaced, nor can the fund receive cash instead. I've been advised there are groups currently lobby…[Read more]
grateful replied to the topic Improve a property in an SMSF – Compliance Issue in the forum Legal & Accounting 14 years ago
Thanks for looking into this Mike, your answer makes sense. I've since been looking into ATO rules on replacement assets, and also what constitutes substantial vs cosmetic renovations. Cosmetic renovations are allowed apparently. Although lots of examples are given, the info seems contradictory or ambiguous. I am concerned that as work is done o…[Read more]