Tax Planning Strategy 193 | Purchase a Farm Using Your Super

Tax Planning Strategy 193 involves using your SMSF to purchase a farm (or hobby farm) and then leasing it back to the taxpayer (or associated entity) to operate a farming business. This strategy has the following attractions:

• Ability to combine the superannuation fund balances of up to 4 family members to purchase the farm.
• The superannuation fund can finance the purchase of the farm.
• The arms-length lease rental income payable to the SMSF is only taxed at 15% (or nil if in pension phase).
• The taxpayer (or associated entity) operates the farming business and can access all the primary production related tax concessions including immediate write off for fencing and water facilities.
• The taxpayer operating the farming business receives a tax deduction for the farm rental payments made.
• The member can live on the farm rent free (without breaching any SIS Act provisions).