Going by what you've written here, this may come as a surprise to you, but yes indeed, you CAN actually hold your own business property in a self-managed superannuation fund.
Not the BUSINESS operation itself; only the property it runs from. Usually the business entity would rent the property from your SMSF.
AFAIK, this has been the case ever since Paul 'L.A.W. Tax-Cuts' Keating, whom for some unfathomable reason you apparently consider the country's best Treasurer, introduced compulsory super back in the early 90s and even before self-managed super funds started being called that.
Exactly why that exemption from related party rules came about, only the 'experts' at Treasury may know, by being, perhaps, able to trace their old, archived records.
This particular rule only applies to business property; if you have a residential investment one, you are by law prohibited from using it personally or allowing any related parties to do the same, even if market rents were to be charged. In other words, you can't generally have the house you live in your super fund - even if you do operate a business from a part of it.
Having farm properties in SMSF entities simply acknowledges that the occupancy of such is incidental to the fact you are usually located in a remote area, so commuting from elsewhere would be problematic.
Labor has always hated self-managed funds for this one main reason - namely that you can own direct property in one. And, more recently, that SMSF entities can actually borrow to acquire property assets, even though the rules on that are ridiculously complicated and it is more expensive to do that than outside of super.
This is one major area their industry funds cannot compete and consequently have, over the years, lost many of their top clients to the SMSF space.
Furthermore, Labor also hate farmers, so this unrealised gain tax is perfect to both punish SMSF property owners AND the farmers as well. Win-win! Whatever it takes!
Without getting overly technical, let me also add that having farm or even just ordinary business properties in a SMSF can be a valid asset-protection strategy, so it's not all just about the potential tax advantages.
In that particular space though, both LIB/LAB have over the years done their best to invalidate such arrangements, so it's now mostly not worth doing.
And lastly, both LIB/LAB always need/want more revenues. SMSF owners tend to be better off as well as more independent types that the usual Australian tax cattle, so punishing them and getting more money out of them ticks all the boxes.
The big laugh on this issue for Chalmers and Albanese is, that owing to the vociferous protest against their proposal to tax UNREALISED gains, that factor gets the core reactionary pushback, with no similar noisy squeaking against the other proposed change, to increase the tax rate. So they have the political option, of walking back from the tax on unrealised gains - smugly satisfied, that tripling (is that right?) of tax on realised capital gains within super funds (their main goal - or to discourage holdings > $3M in super?) will be 'locked & loaded'.
Not tripling tax on realised gains. But you will not receive any credit for the tax paid on this new one along the way. The new tax is on the growth of the fund. Some of that growth will be due to income earned so they are doubling tax on some of the income and new tax on the unrealised gain. I agree totally with John B. They hate self-managed super and instead of just banning them they continually prick them like death from a thousands cuts. They want us all in a Union fund, that sponsors Ruby teams.
Going by what you've written here, this may come as a surprise to you, but yes indeed, you CAN actually hold your own business property in a self-managed superannuation fund.
Not the BUSINESS operation itself; only the property it runs from. Usually the business entity would rent the property from your SMSF.
AFAIK, this has been the case ever since Paul 'L.A.W. Tax-Cuts' Keating, whom for some unfathomable reason you apparently consider the country's best Treasurer, introduced compulsory super back in the early 90s and even before self-managed super funds started being called that.
Exactly why that exemption from related party rules came about, only the 'experts' at Treasury may know, by being, perhaps, able to trace their old, archived records.
This particular rule only applies to business property; if you have a residential investment one, you are by law prohibited from using it personally or allowing any related parties to do the same, even if market rents were to be charged. In other words, you can't generally have the house you live in your super fund - even if you do operate a business from a part of it.
Having farm properties in SMSF entities simply acknowledges that the occupancy of such is incidental to the fact you are usually located in a remote area, so commuting from elsewhere would be problematic.
Labor has always hated self-managed funds for this one main reason - namely that you can own direct property in one. And, more recently, that SMSF entities can actually borrow to acquire property assets, even though the rules on that are ridiculously complicated and it is more expensive to do that than outside of super.
This is one major area their industry funds cannot compete and consequently have, over the years, lost many of their top clients to the SMSF space.
Furthermore, Labor also hate farmers, so this unrealised gain tax is perfect to both punish SMSF property owners AND the farmers as well. Win-win! Whatever it takes!
Without getting overly technical, let me also add that having farm or even just ordinary business properties in a SMSF can be a valid asset-protection strategy, so it's not all just about the potential tax advantages.
In that particular space though, both LIB/LAB have over the years done their best to invalidate such arrangements, so it's now mostly not worth doing.
And lastly, both LIB/LAB always need/want more revenues. SMSF owners tend to be better off as well as more independent types that the usual Australian tax cattle, so punishing them and getting more money out of them ticks all the boxes.
The big laugh on this issue for Chalmers and Albanese is, that owing to the vociferous protest against their proposal to tax UNREALISED gains, that factor gets the core reactionary pushback, with no similar noisy squeaking against the other proposed change, to increase the tax rate. So they have the political option, of walking back from the tax on unrealised gains - smugly satisfied, that tripling (is that right?) of tax on realised capital gains within super funds (their main goal - or to discourage holdings > $3M in super?) will be 'locked & loaded'.
Not tripling tax on realised gains. But you will not receive any credit for the tax paid on this new one along the way. The new tax is on the growth of the fund. Some of that growth will be due to income earned so they are doubling tax on some of the income and new tax on the unrealised gain. I agree totally with John B. They hate self-managed super and instead of just banning them they continually prick them like death from a thousands cuts. They want us all in a Union fund, that sponsors Ruby teams.