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Super fund owns half of a holiday rental.
Can the trustees provide the cleaning (not in a cleaning business)?
If they do, are they
Required to charge for the cleaning
Not allowed to charge for the cleaning
Similarly if they perform minor repairs, but they are not a qualified builder.
Materials – if materials purchased by trustees, presumably they should be reimbursed?
Would it change any of these answers if they owned half the property outside the fund, or same rules apply?
I am thinking they can provide the cleaning (although may be more transparent to pay a third party), and they would not charge, same with minor repairs, and materials should be reimburse.
Are we on the right track here?
Hi Campbell
The NALI rules are complicated. Auditors may have different views re your query.
My view would be better to pay a third party for the cleaning as then no risk of breaching the NALI rules.
The NALI rules could apply if the cleaning was not being paid for as it could be considered non-arm's length expenditure. For a trustee to be remunerated for cleaning they would also need to be qualified to provide that service (under the SIS legislation).
To complicate it further when a service is not charged for it could be assessed as being a contribution to the Fund.
Re the materials they should be reimbursed by the Fund if they belong to the Fund. Preferably the materials would be paid directly by the SMSF.
Thanks
SMSF AAA