There are a number of SMSF’s that now own either commercial or primary production property that is leased back to a related person (or business) of the super fund. In addition some borrowing arrangements within super funds are with related parties. As part of their audit process, the ATO is currently reviewing related party lease and borrowings arrangements. The purpose of these reviews is to ensure transactions are in accordance with rental and loan documentation and on commercial (arms-length) terms.
As a result it is very important that if your SMSF has any related party transactions (such as rent, interest or loan repayments), they are conducted in accordance with the drafted documentation. If reviews of your affairs indicate that additional payments (or withdrawals) need to occur for the 2014/2015 year we strongly recommend that these matters be attended to prior to 30 June 2015.
If you have any questions in relation to related party matters please contact Daniel Uden.