Hi Anna

Yes a Fund could purchase a caravan from an unrelated party & lease it out to holiday makers. I have assumed that a caravan is not a "motor vehicle" and is not considered a collectable or personal use asset.

You would need to make sure the Fund's investment strategy allows for such an investment and also that the members do not personally use the caravan as this could be a breach of the sole purpose and the in-house asset rules.

In relation to parking the caravan at the member's house between each use SIS section 109, the arm's length rules, and the NALI / NALE rules should be considered.

In relation to NALI / NALE rules refer LCR 2021/2 - "Non-arm’s length income – expenditure incurred under a non-arm’s length arrangement".

The NALI / NALE rules are complicated so care should be taken.

Paragraph 57 of the ruling states:

"Levi performs these activities as trustee of his SMSF and does not charge the SMSF for this work. Levi’s use of the computer and office equipment at home is minor and incidental in nature and will not, of itself, indicate that he is undertaking these services in any capacity other than as trustee for his SMSF."

Preferably allowing the caravan to be parked at the member's house is "minor and incidental in nature and will not, of itself, indicate that he is undertaking these services in any capacity other than as trustee for his SMSF".

As auditor I would recommend that the Trustee gets a private ruling from the ATO re the ability for the Fund to own a caravan, rent it to holiday makers and store it at the member's residence when not being rented.

Thanks

SMSF AAA