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I have a audit client who wants to transfer a loan from himself to his SMSF and claim the transfer as concessional contributions. Can this happen. What are the ramifications.
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Hi Danny
I am not sure I understand the question. I assume that the member has loaned money as an investment & they want to transfer this asset to the SMSF.
I assume the accounting entry would be if to occur:
Dr Loan $20,000
Cr Contribution $20,000
My view would be that a SMSF cannot acquire such an asset (being a loan) from a related party (per section 66 of SIS) so on that basis the transaction cannot occur (as it is not an asset that is allowed to be acquired by a SMSF from a member).
Thanks
SMSF AAA