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).
"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"
- Bono: U2