Hi Chris

The SIS Regs at 13.18AA states "a trustee of the fund enters a lease arrangement with a related party".

The Regulations are referring to a related party not a member.

My view is that a lease of a motor vehicle to a related party is not allowed per SIS. If the employer is a related party then the Fund cannot lease a motor vehicle to it.

Thanks

SMSF AAA

SIS regs extract:

"SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS 1994 - REG 13.18AA

Self managed superannuation funds--investment in collectables and personal use assets

(1) For section 62A of the Act, this regulation applies to investments involving any of the following ( section 62A items ):

(a) artwork (within the meaning of the Income Tax Assessment Act 1997 );

(b) jewellery;

(c) antiques;

(d) artefacts;

(e) coins, medallions or bank notes;

(f) postage stamps or first day covers;

(g) rare folios, manuscripts or books;

(h) memorabilia;

(i) wine or spirits;

(j) motor vehicles;

(k) recreational boats;

(l) memberships of sporting or social clubs.

Asset must not be leased to related party

(2) Each trustee of a regulated superannuation fund that is a self managed superannuation fund commits an offence if:

(a) the fund holds an investment involving a section 62A item; and

(b) either:

(i) an interest in the item is leased to a related party of the fund; or

(ii) a trustee of the fund enters a lease arrangement with a related party of the fund in relation to the item."

Thanks for your comments.

Much appreciated