Changes to self-managed super fund (SMSF) regulations effective from 1 July, 2010, mean businesses can transfer their business real property (BRP) into a SMSF and attract only $50 in stamp duty, according to chartered accountancy firm Nexia Court.
Transferring a BRP into a SMSF could help free up cash within superannuation so the trustee could use the cash for consideration of the transfer, according to Nexia Court’s financial services partner, Craig Wilford.
“Also, you’ll attract little or no capital gains tax (CGT) if the property falls within the small business CGT concessions. You’ll receive a rental reduction at your tax rate and only pay 15 per cent tax on the rental income within your SMSF,” he said.
It is also possible to legally pay no tax on the rental income and capital gains within the SMSF for those aged over 55, he said.
“In addition, you’ll avoid having to pay premium rent on business premises by buying [the] premises in a SMSF and taking advantage of the high rental yield yourself. Your SMSF can pay for the BRP by cash via member’s contributions or borrowed money,” Wilford said.
Transfers prior to the change in legislation would have attracted existing stamp duty fees, which would equate to $9,000 on a $300,000 property and $40,000 on a $1 million property.
The concession applies only to BRPs being transferred into a SMSF. The transfer must satisfy the requirements of the NSW Duties Act, which stipulates one or more individuals, rather than a company or trust, currently owns the property.
