Hi Campbell
Yes a SMSF can sell a property to a related party. It has to be done on an arm’s length basis so yes an independent valuer should provide a valuation.
In your example yes the SMSF can sell the property to a related party. It has been done on an arm’s length basis as an independent valuer has provided a valuation. The property could be a commercial or a residential property.
SIS legislation section 66 puts restrictions on SMSF’s acquiring assets from a member or from related parties. SIS (other than re collectables) does not put restrictions on SMSF’s being able to sell assets to members or related party. Any sale (or transfer) of a SMSF asset has to be done on an arm’s length / commercial basis as per section 109 of SIS.
Section 66 of SIS does allow a SMSF to purchase / acquire “business real property” from a member / related party as long as it done at market value. Yes a commercial property would normally meet the requirements of being “business real property”.
Yes the trustees have to consider stamp duty implications and they differ based on the state the property is in.
Yes if a SMSF is 100% in retirement phase pension mode then yes any capital gain on the sale of the property would be tax free.
Not an audit issue to consider but the trustees should also consider if rather than selling the property to the member / related party can they / should they do an in-specie transfer of the property to a member as a lump sum payment / pension commutation. Again tax and stamp duty implications would need to be considered.
Thanks
SMSF AAA