Our rural friends are a canny lot and you have got to admire their thinking. 

For an SMSF to own farmland the key test is whether the farm is “business real property” i.e. are the land and buildings used wholly in the business? If the property is used in primary production – farming – it meets this condition. The SMSF can invest in upgrades to the “business real property” but not equipment. 

1. Investing in crops?   

So what about crops? Crops by their nature being annual and temporary are out.  

However a number of farmers are successfully using their SMSF to invest in orchards, vineyards and forestry. As the trees are rooted into the ground and will live for many years, they can be classified part of the property.  

2. Upgrades to the residential property. 

If the farm meets the “business real property” test it’s ok for the dwellings on the property to be used for private or residential purposes. Provided the dwellings are less than two hectares in area. 

The twist being that SMSFs are allowed to spend money to upgrade the property – and that can be extended to the residential dwelling.  Which can then be rented out on Air BnB. 

Though beware – renovations of the building are ok, but new fridges and beds et al are considered moveable and therefore not part of the business real property. 

If you have any questions about what is considered part of the property SMSFR 2009/1 paragraphs 77-80, 83 and 206 are your primary reference. 

Or just give me a ring on 1300 874 787.  

Auditor crack-down continues

Between ASIC and the ATO another eight auditors have been struck off.  

Auditing really is a full-time profession and demands a continual focus on professional development and upskilling. It is too much to cover for part-timers. 

If you are struggling with long audit time lags, or at all concerned about your auditor, do get in touch with us.  

The Spring Road Tour is back on 

TriSuper’s annual educational tour of breakfast events is back. Playing all the greatest SMSF hits of the past 18 months, and up and coming bangers. The best way to start any day. 

We will be locking in dates for Port Macquarie, Coffs Harbour, and Orange and of course the home town of Newcastle. 

A formal invite will be coming out in the next few weeks. 

Missing out?  

If your town is not on the list but you’re keen to attend, then please contact us - name your town and we’ll see what we can do.