SMSF and Stamp duty
by Elizabeth Romeril
Purchasing property in the name of a self-managed superannuation fund (‘SMSF’) can be advantageous, depending on your financial circumstances. You should always get advice from a financial planner before commencing an SMSF and advice from your accountant before purchasing assets on behalf of your SMSF to ensure your funds is compliant.
Once your SMSF ends, or the superannuation is paid out, and the superannuation property is to be distributed to the members of the fund. At that time, you will understandably wish to minimise the costs involved in any property transfers.
The State Revenue Office provides an exemption on stamp duty when a property is transferred from a trustee of a SMSF to a member of that SMSF.
To successfully claim this exemption and avoid the costs of stamp duty, you will need to show the following:-
- The current registered proprietor is authorised to act as trustee of the SMSF and the transferee is a beneficiary under the terms of the SMSF trust deed. This is usually achieved by providing a certified copy of the trust deed or other supporting documents if the deed cannot be produced;
- The property is currently held by the registered proprietor in their capacity as trustee under the terms of the SMSF. This will include the trustee providing a statutory declaration outlining how and when the property became an asset of the SMSF;
- Proof of the market value of the property being transferred. This can be substantiated by way of letter of appraisal from a licenced real estate and or valuation from a certified practising valuer; and
- Financial statements of the SMSF which show the value of entitlement (member account) in the SMSF of the member who will obtain the property.
This stamp duty exemption will only be applied insofar as the value of the property reflects the member’s entitlements under the terms of the SMSF. If the value of the property exceeds the member’s interest in the SMSF, then stamp duty will have to be paid on the difference in value.
SMSF can be an attractive vehicle for those who wish to have more control over their superannuation entitlements, however they can involve complex transactions that require the advice and assistance of professionals to help you take full advantage of its benefits.
TBA Law is qualified and experienced in dealing with a wide array of SMSF issues. Contact our office today to discuss your current SMSF or the possibilities of setting up a SMSF as part of your estate planning.