Hi Lacey
Thanks, as a positive it appears they have set up the process correctly re the bank account and the purchase of materials (to avoid acquisition of assets from related party issues).
The ATO raised their concerns in “SMSF’s and property developments” in SMSFRB 2020/1 which can be found at:
https://www.ato.gov.au/law/view/pdf/adhoc-html/smsfrb2020-001.pdf
The further details I would be requesting is documentation to support that the invoices / contract amount have been calculated on an arm’s length basis.
The ATO Bulletin states that:
“All transactions should be carefully documented to ensure that:
• there is proof of arm’s length dealings
• the arrangements put in place reflect the legal status
• the parties intend, and they are permitted by the SMSF’s deed and investment strategy, to undertake the property development transactions.”
Thanks
SMSF AAA