This strategy involves a business owner transferring their business premises into their self-managed super fund (SMSF).
This has the following advantages:
- Rent paid to the SMSF is taxed at between 0-15% in the SMSF. The 0% rate being applicable when the SMSF is in pension phase.
- The business receives a tax deduction for any rent paid to the SMSF.
- When the SMSF sells the premises any capital gain will be taxed at between 0- 10%. The 0% rate being applicable when the SMSF is in pension phase.
- Asset protection – SMSF assets are protected in the event the business or owner has financial difficulties.
Stamp duty and capital gains tax may be payable with the transfer of the business premises to the SMSF.
The small business CGT concessions will apply with the sale of the business premises to the super fund, so no tax may be payable on this transfer.
A stamp duty concession or exemption is available in certain states for the sale of business premises by an individual or trust to the super fund. Legal advice and assistance is required to achieve this.