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We have an smsf that owns a Property ( land is about 800 sqm ) in partnership with the 2 members ( mum and dad ) located in Tasmania . But the Title Deed shows the Property split into 2 separate parcels of land . when first purchased ( in 2013 ) the land had a residential building on it which is rented out and rent received wholly by the smsf . Subsequent to purchase ( about 2015 ) the smsf members built a separate residential dwelling on the vacant land portion ( same title but on the separate parcel of land ) with personal money used to build the house and they live in the house but pay no rent to the smsf because they used their own money to build the house on the separate parcel of land which they say is the members half of land . Not sure whether it is a Contravention , my guess is Section 65 ( member loan ) and / or section 62 sole purpose , if a Contravention . My gut feeling is that there is no Contravention because the Title Deed search shows 2 distinct parcels of land on 1 Title . Please provide your guidance .
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Hi Laurie
My understanding of a partnership is that the partners own the assets and they would not be owned by any particular partner.
When purchased in 2013 did the SMSF clearly buy the parcel of property with the house on it?
Is there a partnership agreement?
It would be great to get other forum members views on this question.
Thanks
The Auditors Institute