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Hi there,
A unit trust has issued 60% of units to the SMSF and 40% to the member. The unit trust holds a commercial property and a bank account. During the year the member sold a portion of their units to the SMSF. A property valuation was obtained at the date of sale and the units valued at their net asset value.
The value of the units acquired from the member amount to approximately 10% of the SMSF's total assets at balance date.
Our concerns relate to the prohibition of acquiring unlisted securities under s66. Additionally, despite the transaction being performed at market value, the investment would exceed the 5% threshold for the in-house asset exception.
Could you please advise whether any further information/sections may be relevant in determining the appropriateness of the transaction. Also, are there any further issues worth considering?
Thank you,
Peter
Thanks SMSFAAA,
To confirm, the acquisition falls under s66(2A) Exception for certain in-house assets. Given it has been completed at MV and does not result in greater than 5% IHA (due to complying with 13.22C), no issues result from the transaction.