It is a common complaint of SMSF advisors and trustees that a residential property owned by a member or related party cannot be bought or transferred into their SMSF.

It has always been understood however that Section 66 of the SIS Act allows listed shares and commercial properties to be transferred at market value.

Interestingly, there is scope to transfer the related residential property into the SMSF if it can be shown to be business real property which is being used wholly and exclusively in one or more businesses.

This could commonly occur where a residential property is otherwise used for example as a doctors surgery or accountants office.

However, you also may have clients who own several residential properties in their own name or through a trust or company structure.

In certain circumstances it may be possible to argue that your client is in the business of investing in and leasing of residential properties.   The residential property could then meet the business real property definition.

We have had recent success with the ATO in arguing this position and are happy to have a chat with you to run through particular client scenarios.