Question:
Self Managed Super Funds – Investment properties
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
A Self Managed Super Fund wanting to borrow to buy a property faces an unnecessary complication in that the property must be held by a separate company under a bare trust on behalf of the Super Fund.
When the borrowing is repaid, it is necessary to transfer title of the property from the bare trust to the Super Fund, however in many States this would involve a substantial stamp duty cost.
In Queensland, the Duties Act 2001 has been amended to exempt from stamp duty a transfer of property to the Super Fund when the loan is repaid.
Due to the wording of Section 71(8) and (9) of the Superannuation Industry (Supervision) Act, it is a requirement that on repayment of all borrowing, the property be actually transferred into the name of the Super Fund. Hence, in some States where stamp duty is applicable, it would be wise to ensure that any borrowing arrangement is not fully repaid wherever there may be difficulty in meeting any stamp duty cost.
Accordingly, it is very important to obtain professional advice before your Super Fund enters into any borrowing arrangement involving the acquisition of an investment property.
Stamp duty impositions and exemptions vary from State to State.
WTB 32/1448.
