Archives: Investax FAQs

While the Bare Trustee holds the legal title, the SMSF has control over property management and decision-making. The SMSF trustee has the authority to make decisions about the property, including leasing, selling, and maintaining it, in line with superannuation laws.

Yes, you can use a Bare Trust for both residential and commercial property investments. However, the same rules and restrictions apply, including compliance with the sole purpose test and other SMSF regulations.

A Bare Trust is commonly used in SMSF property investment to comply with superannuation and legal regulations. It separates the legal ownership (held by the Bare Trustee) from the beneficial ownership (held by the SMSF), ensuring that the property investment aligns with SMSF rules.

A Bare Trust, often used in Self-Managed Super Fund (SMSF) property investments, is a legal arrangement where a trustee holds property or assets on behalf of the SMSF. It is a transparent trust structure where the SMSF holds the beneficial ownership of the property, while the Bare Trustee holds the legal title.

Borrowing within an SMSF for property investment, known as a Limited Recourse Borrowing Arrangement (LRBA), comes with several risks, including:

• Higher Costs: SMSF property loans can be more expensive than other property loans.
• Cash Flow: Ensuring your fund has enough liquidity to cover expenses, including loan repayments and property-related costs.
• Loan Balance: Planning for loan repayment in the event of member illness, disability, death, or rental vacancy.
• Unwinding Challenges: Difficulty in reversing the arrangement if loan documents aren’t correctly structured, potentially resulting in substantial losses.
• Tax Limitations: You cannot offset tax losses from the property against your taxable income outside the fund.
• Alteration Restrictions: Significant property alterations are restricted until the SMSF property loan is fully repaid.

When investing in property through a Self-Managed Super Fund (SMSF), you must adhere to several crucial rules:
• The property’s primary purpose should be to provide retirement benefits to fund members (Sole Purpose Test).
• You cannot acquire property from a related party of a fund member.
• The property cannot be lived in by a fund member or their related parties.
• Renting the property to a fund member or their related parties is also not allowed.

Our expertise in Self-Managed Superfund (SMSF) Tax Returns is a cornerstone of our services. We maintain a dedicated team of professionals specialising in SMSF taxation matters, well-versed in the unique tax rules and regulations governing SMSFs. Beyond tax returns, our comprehensive SMSF knowledge extends to accounting, auditing, and financial statement preparation to ensure compliance with regulatory requirements. We remain up to date with evolving SMSF legislation, providing proactive tax planning to optimise your fund’s financial outcomes while offering transparent and efficient service throughout the process. Our tailored SMSF strategies are designed to align with your specific circumstances and investment goals, making the SMSF tax return process seamless and effective.
Moreover, we utilize state-of-the-art software, such as Class Super, which automatically feeds all your share transactions into the system, ensuring seamless SMSF tax return and audit processes. Notably, this technology eliminates the need for you to incur additional expenses for providing annual market valuations of SMSF properties, as our software provides this crucial information, further streamlining the SMSF management process. Our goal is to offer a comprehensive SMSF solution that combines professional expertise with cutting-edge tools, making your SMSF management as efficient and hassle-free as possible.

Our expertise in various asset classes, including shares, managed funds, index funds, and cryptocurrencies, is the cornerstone of our services. We possess an in-depth knowledge of the regulatory landscape and the ever-evolving world of cryptocurrencies and blockchain technology. Additionally, we have a deep understanding of various share transactions, ranging from standard activities such as dividends and dividend reinvestment plans (DRP) treatment to more complex transactions like share buybacks and their impact on the cost base for dividend reinvestment plans (DRP).
Furthermore, we provide guidance to clients on various ownership structures, such as Discretionary Family Trusts and company structures, especially when managing large portfolios. Our expertise is designed to ensure that you receive comprehensive support and insights across a broad spectrum of financial assets, allowing you to make informed decisions and optimize your investments.

Yes, as a foreigner with an investment property in Australia, you are generally required to lodge an Australian tax return. The Australian Taxation Office (ATO) has specific rules and obligations for non-resident property owners. You will need to declare your rental income, and depending on your circumstances, you may be eligible for certain tax deductions related to your property expenses. It’s advisable to consult with a tax professional, such as Investax, or the ATO to ensure you comply with Australian tax laws and benefit from any available tax concessions.