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Four key rules when dealing with related parties


Now that we have identified who qualifies as a related party. There are four key rules to obey when dealing with related parties and your SMSF to ensure compliance and effective management of your fund.

  1. Your fund needs to be maintained for the sole purpose of providing death or retirement benefits to your members or their dependants.
  2. No one associated with your fund should get a present-day benefit from its investments. So no using the assets of the fund for your personal enjoyment!
  3. There are several investment restrictions that apply to transactions involving ‘related parties’ of your fund and ‘relatives of members’. So you need to carefully check before you acquire any assets from a related party. There are, however no restrictions on selling investments from your SMSF to a related party – the sale just needs to be at market value and on commercial terms.
  4. Any allowable dealings with related parties should always be done on an arm’s length basis and at market value.

Ready for more SMSF investment insights? Click here to discover the next rule for for successful SMSF investments or contact our teams of experts for personalised advice on your superannuation investments today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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