Is it possible to transfer my pre-owned Western Australian Rock Lobster fishery quota units into my existing SMSF?
SMSFs are generally prohibited from acquiring assets from related parties (whether it is purchased by the SMSF or contributed into the fund). There are some exceptions to the above rule for acquiring related party assets, including:
• Listed securities (ie shares, units or bonds listed on an approved stock exchange, such as the ASX) acquired at market value.
• Business real property (ie freehold or leasehold interests in real property used exclusively in one or more businesses) acquired at market value.
• An in-house asset where the acquisition would not result in the level of the fund’s in-house assets exceeding 5%.
• Units in a widely held unit trust, such as a retail ,managed fund.
In-house asset rules
An ‘in-house asset’ is generally defined as:
• An investment by an SMSF in a related company or trust (ie a fund owns shares in a related company or units in a related trust).
• An asset of an SMSF that is leased to a related party.
• A loan made by an SMSF to a related company or trust.
An investment, lease or loan that is an in-house asset is not prohibited, but is limited to 5% of the market value of the fund’s assets.
The Answer: If your pre-owned Western Australian Rock Lobster fishery quota units are not included in the exceptions then you cannot transfer them into your SMSF.