One of the more effective long-term wealth creation, tax minimisation and asset protection strategies, can be transferring your owner-occupied commercial property to your self-managed superannuation fund (SMSF).
But what if you purchased your property some time ago (outside of Super) and you would like to move it in there now? This is possible, but there are a few things you need to considered to determine if this is a strategy that could work for you:
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As the property will be purchased by the SMSF, will it be possible for you to get enough funds into the Superfund to facilitate the purchase?
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Will the SMSF need to borrow? Banks will allow the SMSF to borrow 60% – 70% on a non-recourse borrowing arrangement to facilitate the transaction including any costs; all of which need to be paid by the SMSF.
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Will stamp duty be payable on the transfer? There are circumstances where the transaction can be assessed for nominal stamp duty ($20). You might need to seek legal advice to review your situation.
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Will there be a capital gain on the property and if so, how will that be treated? Capital gains tax can be avoided in many circumstances.
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Will surplus funds come out of the SMSF and if so, how can the funds most effectively be used to improve your financial position? In many cases funds come out of the SMSF and can be used to reduce personal debts.
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What impact will the transfer have on your cash-flow position? What are the taxation benefits and will the transfer enable you to repay the debt in a shorter amount of time? There are structures that can improve your personal cash flow whilst paying down your debt faster.
If you would like more information, speak with a finance broker experienced in facilitating transferring commercial property into SMSF for more information regarding finance structures. A good finance broker will also be able to put you touch with a Financial Planner/Tax Adviser that can assist you.
At Westminster National, we have experienced brokers who can help you not only to review your current loans but also to transfer commercial property to SMSF. Contact us today to find out more!