.png)
Can SMSF invest in Time share?
One of my clients have invested $4000 (1.3% of the total asset) and provided with an Investment strategy stating "Direct investment in property incliding Time share"
Thanks
top of page
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.
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.
bottom of page
Hi Shalendra
On the basis of materiality you arguably would have no issue with the investment. If the trustees simply see it as a good investment and are going to get no personal benefit from it there should be no issue from a SIS viewpoint.
If the timeshare was acquired so the members could take a holiday once a year you may have a breach of the sole purpose test (section 62 of SIS). The timeshare could be rented to a member of the Fund as it is less than 5% of the assets of the Fund and would not breach the in-house asset limit of 5% of assets. You would need to determine that the investment is a proper investment and not just to allow the members to get a present day benefit.
The timeshare may be considered to be a personal use asset and if so would be caught by the collectable / personal use asset rules. Personal use assets cannot be leased to or used by a related party.
If any other member has a view on this question please let the forum know.
Thanks
The Auditors Institute