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Ploughing through: SMSF setup saved Mark’s farm from bank foreclosure

Background

Mark owned a farm and was in financial trouble. He couldn’t meet the repayments and the bank was planning to foreclose on his farm property.

Mark was at risk of losing both his business and his home, which was on the same land.

Goal

Mark had a good amount of money in his industry Super fund.

His accountant approached TriSuper Auditors with an idea to set up an SMSF that could buy the farm and allow Mark to remain working and living there.

Process

Normally a Trustee can’t live on a property that is owned by their SMSF. The key exception is where the land’s main purpose is primary production (farming). Mark’s property was a mixture of agriculture, aquaculture, cattle farming and house. In this case the land area of the residential property was a small portion of the farm’s total land.

TriSuper Auditors checked the SMSF rules for land used for primary production and found that the accountant’s proposed SMSF structure would be compliant.

Outcome

Mark’s SMSF structure allowed him to keep his farm business and his home.

Farming is still a tough gig, but Mark was very happy to be able to stay and continue working on his farm.

If these SMSF case studies spark ideas or questions call on 1300 874 787 and Joel will be happy to advise.

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