THE AUDITORS INSTITUTE | FORUM

Archived Forums

When you become a member of The Auditors Institute, you immediately gain access to expertise, advocacy for your profession and peace of mind.

Ask a question in our members-only forum or use the search function to find prior technical discussions on your topic. You can expect a response within 24-48hrs.

Want to become a Member?

Join Now

Already a Member?

Disclaimer

The forum is made available by The Auditors Institute Ltd for the benefit of it’s members only, and its primary purpose is to facilitate education, training, and discussion between members. The information and answers provided within the forum are of a general nature and do not consider any specific circumstances, objectives, financial situation or needs related to the matter/s raised. The responses should not be construed as financial advice, and each Member should seek their own professional advice before making any decisions. The Auditors Institute Ltd and its representatives are not responsible for any actions taken based on the information provided in the forum.

To test this feature, visit your live site.

Jean Rey

Jan 10, 2022

Reg 13.22C Unit Trust

in SMSF Technical Forum

Hi SMSFAAA team,

Could you please advise about the meaning of REG 13.22C subparagraph 71(2)(f)(i) "an interest in another entity". Does the entity refered to is an unlisted entity (more likely a related entity)?

Can the unit trust invest in an unrelated entity (listed company for example)?

If not, please advise why?

Yours Sincerely

Jean rey

2 answers0 replies

Comments (2)

THE AUDITORS INSTITUTE

Jan 11, 2022

Hi Jean

Yes under SIS regulation 13.22C a Fund is allowed to invest in an ungeared unit trust (or company) if the rules are followed.

The regulations require that the assets of the unit trust (amongst other requirements) do not include "an interest in another entity" (refer Reg 13.22C(2)(f)(i)).

My view is that another entity would include a listed company or an unlisted company.

As a result if a Fund invested in a 13.22C ungeared unit trust it would be treated as an in-house asset if the trust had an interest in another company (being listed or unlisted).

That is my view is that even if the listed shares owned by the Trust are immaterial if the Trust had such an asset then the trust would not meet the requirements of 13.22C.

Thanks

SMSF AAA

Jean Rey

Jan 11, 2022

Hi SMSFAAA,

In prepraring your answer, could you please consider the materiality of the investment in the listed company (about 3% of the total assets of the unit trust).

Thank you in advance.

Yours Sincerely