SMSF buys the business real property from a related party. There is no contract of sale. The solicitor doing the deal claims that the transfer of title and market price confirmation is enough. Is it the case?
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Hi Natalia
Property transfer rules are state based.
I assume the SMSF has paid for the property and not received the property as a contribution.
I also assume that there should have been stamp duty paid on the purchase of the property by the SMSF.
My view is that if the lawyer has advised that a contract of sale is not required I would accept this on the basis that:
Market price has been paid for the property. (section 109 SIS)
The property is business real property. (section 66 SIS)
The title has been transferred to the name of the trustee of the Fund & there is documentation to support that the titles office knows that the owner of the property is the SMSF.
Stamp duty has been paid on the purchase of the property (assuming it is not a contributions and there is no stamp duty exemption).
The GST impact of the purchase of the property has been considered.
If any other forum members have a view on this please let the forum know.
Thanks
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