The ATO is concerned that people are using their SMSFs to invest in property without fully understanding their obligations under the law, or that some people are seeking to take advantage of certain types of arrangements.
“The fine details are important and trustees need to be sure that property is the right investment for their SMSF and that the arrangement is legal.”
“Some of these arrangements, if structured incorrectly, cannot simply be restructured or rectified. The only option may be to unwind the arrangement which could involve forced sale of assets at an inconvenient time. This could be very expensive for the fund with potential stamp duty and tax consequences.”
In addition, the ATO states that where arrangements are deliberately entered into to get around the law, this can result in the fund’s trustees being disqualified, facing civil penalties or even facing criminal charges.
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