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What is an in-house asset for Self Managed Superfund (SMSF)

An in-house asset for a Self-Managed Superfund (SMSF) typically refers to an investment or asset that is related to, or involves, a member of the SMSF or their related parties. According to the Australian Taxation Office (ATO) regulations, an in-house asset can be:

  • a loan to, or an investment in, a related party of your fund
  • an investment in a related trust of your fund
  • an asset of your fund that is leased to a related party.

The ATO instructs that in-house assets must not exceed 5% of the total market value of the Self-Managed Super Fund’s (SMSF) assets.

This rule is designed to ensure that SMSFs are primarily used for the purpose of providing retirement benefits to their members, and to prevent the misuse of superannuation funds for personal or related party financial dealings. Therefore, the investments and transactions made by an SMSF need to comply with this rule, among others, to meet the sole purpose test and ensure the fund is being used appropriately for retirement savings.

Source – ATO