Transfer assets from trust to SMSF

Hi Terry, Brett and All
This is possible but first correct your terminology.
There must be no "transfers" or "selling".
The correct terms are "issue" and "redemption" of units.
S 66 prohibits the "intentional acquisition" of assets by a SMSF Trustee from a member or related party.
Business Real property and some other itemised assets are excluded.
So heres the strategy based on my 33 years experience as a specialist SMSF practitioner advising on property and business acquisition planning.
1. You need the right unit trust deed with the necessary definitions and permissions,
2. The SMSF can apply for new units to be issued,
3. After they issued and unit price has been paid, certificates issued and transactions recorded, then
4. Units owned by related parties can be redeemed for cash in the trust,
Warning ! if some time has elapsed since the assets in the trust were acquired you will need to consider changes in value to establish unit prices on an arms length basis (S109 SISA) and CGT consequences. A market valuation may be necessary.
Why does this NOT breach S66 ?
Because the asset to be acqured (new units)  is and has not ever been an asset owned by a related party. Why is the unit being issued by the trust (which is a related party) not an asset – because it is a liability of the unit trust and only has value to the owner – the SMSF which is obtaing a newly created asset.
Why is the issue and redemption not a "transfer" = because all the units exist at the same time and are owned by different parties. Thererfore they cannot have had ownership of the same assets,
We have developed many very useful and powerful strategies over the years that enable many "impossible" outcomes.
Regards
Anthony at A4Companies
 

Hi Terry & All

You mean S66 (3) ?

Well I see this as a permitted act, as it does not result in a breach for the reasons stated before. If the ATO want to augue that a breach has been committed because of S65(3) then you have  an "arguable case" in response and an AAT defence. This is one of the problems where the Regulator also collects the taxes and applies penalties. SMSF's need an independant regulator without an axe to grind as we had when the iSC was the regulator. Just always remember the ATO does not make the law although it tries to pretend it does.

Regards

Anthony

Terry
Try reading SMSF Ruling  SMSFR 2009/1 its all about BRP, you may be surprised at what it includes.
However I cant see the point in putting a lease expense in a SMSF and it will probly breach S65 anyhow.
Another issue is that the above ruling states that property laws state that any appurtenances which are attached become part of the land title. So your friend has only a right to occupy under the lease terms and has no other rights. When the lease is up the building will stay with the property title holder.
Cant see any virtue in messing with it Terry.
Tell me if you can.
Regards
Anthony

Hi Terry

I'm with you…the act clearly states that once your aged 65 or over (on 1st July) you cannot use the bring forward provisions, you can only contribute a maximum of $150,000 of non concessional contributions per year, and only if you satisfy the work test.