#8408
Awan Hammad
Participant

    Hi M.J.

    A SMSF can only invest up to 5% of its assets in “in-house assets”. In-house assets include a Unit Trust investment where more than 50% is owned or if the entity is considered a controlled trust. I note that there are exceptions to the in-house asset rules for non-geared Unit Trusts but assume in your example you are referring to a geared trust.

    Re your questions:

    1. If A1 & A2 are 2 of the 3 trustees of Z Unit Trust this would make it a controlled Trust.
    2. Yes if AA Super Fund invest in Z Unit Trust and it is a controlled trust then this would be an investment in an “in-house asset”.
    3. Yes if A2 was not a trustee of the Z Unit Trust you could argue that it is no longer a controlled Trust and no longer an “in-house asset”.

    A great summary of the “in-house asset” rules re Unit Trusts can be found at:

    Thanks
    The Auditors Institute

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