Property – concerns for SMSF – lumpy asset could be a problem

Property in self managed super SMSF superbenefit - Property – concerns for SMSF – lumpy asset could be a problem

Lumpy Property SMSF

Feedback from over 600 financial planning, accounting and legal firms across Australia has confirmed that SMSF trustees are completely overlooking what will happen to a so-called ‘lumpy’ asset such as a geared property if a fund member dies. One consequence could be the forced sale of the property – usually at a price well below its actual value; another could be trustees being lumped with a hefty capital gains tax and death benefits tax burden. An asset is considered ‘lumpy’ if it comprises a significant proportion of the total assets of the SMSF and is relatively illiquid. These assets typically include real estate and holdings in private companies.

DOWNLOAD ARTICLE Jackie Pearson, Wealth Management

In the rush to purchase property assets, SMSF trustees may not be considering how these ‘lumpy’ holdings will be sold after their death, according to an SMSF advice and training provider. The consequences of this oversight could be the fire-sale of the property, with the risk of it being sold well below its market value, or of beneficiaries being liable for hefty death benefits and capital gains liabilities, said national manager, training and advice, Topdocs, Michael Harkin.  “According to the feedback we’re receiving from the industry, trustees purchasing real estate with borrowings are quick to calculate what their potential investment gains will be and how to manage loan repayments, but they give scant regard to what will happen to the asset should a fund member die,” said Harkin.
DOWNLOAD ARTICLE Ben Collins, The Financial Standard 


About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
This entry was posted in SMSF Investing, SMSF Property and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s