ATO releases new draft laws on rent relief extension for SMSFs
The ATO has released the new legislative instrument on extending COVID-19 rental deferral relief for SMSFs. ...
"I'm interested in investing in property in my SMSF with my wife. What are the difficulties should we get divorced and how do we go about managing the risks?"
Investing in property through your SMSF can pose a number of di culties in the event of a divorce. The main difficulty faced by trustees of SMSFs holding direct property investments is deciding how to roll out the benefits of one of the members, plus any amounts that need to be split to the departing member without having to sell the property itself.
Quite often though,trustees will have little option but to sell the property to raise the necessary proceeds to pay out the departing member and meet any other requirements of a consent order. Selling the property in such circumstances may see the property fall short of its potential value and force the incursion of agent’s sales commissions, capital gains tax and other fees.
Further difficulties arise where a loan has been used to secure the property as any resulting loan restructure may fail, forcing the sale of the property.
In splitting a member’s balance, the sale of the property may inadvertently see the fund breach the splitting process, something the trustees would need to avoid.
Managing the risks of divorce and its impact on direct property investments is difficult. Finding solutions to prevent the sale of a property may be easier for a larger fund than a smaller one.
It is important to carefully consider these risks before purchasing direct property and where divorce is a higher probability, consider the benefits of avoiding direct property investments.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.