SMSF investment strategies

Last month, the ATO wrote to 17,700 self managed super funds (SMSFs) trustees and threatened fines of up to $4,200.  The letters were sent to trustees where their SMSF had more than 90% of its assets in one asset class. 

It has now come to light that the vast majority of those letters went to those funds where property was the main asset and there was a limited recourse borrowing arrangement (permissible borrowing with super).

The point remains though there is nothing wrong with borrowing nor buying a property within a SMSF.  Both are permissible (as long as all relevant requirements are satisfied).

This includes documenting your decisions to do so within an Investment Strategy.

The only thing that appears to have changed is that the ATO has now re-defined a 23 year old requirement and are now expecting trustees to document the decision why you have decided to do so.

Accountants can’t advise on where you should invest your super (they can only provide a template for you to fill in and complete).  If you need assistance with the process and/or want to know the long term ramifications of your strategy (and options) then you should speak to a financial planner.

At MRS, we will spend today planning for your success.