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Stephen Wight

Apr 29, 2022

IHA rectification query

in SMSF Technical Forum

Wondering if anyone has seen the following solution to rectify an in house asset caused by a related trust failing the 13.22C provisions.

FACTS: SMSF owns shares in unlisted related company (SMSF owns less than 50% of shares however, the company’s sole director if related to SMSF member, thereby rendering it a related company).

PROPOSED SOLUTION: SMSF does NOT dispose of shares in company and cops a contravention of IHA rules for that year, but sole director of company is subsequently removed and replaced with unrelated director (thereby rendering company to be an unrelated entity of SMSF).

QUESTION: Has this rectified the IHA issue going forward? Or is the SMSF still required to disposed of the shares to fully rectify?

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