Menu

A pasture of land growing grain with trees in the distance. Brentnalls Agribusiness; Accounting and Advisory; Hindmarsh; Adelaide

Transfer of Farm Land to Self-Managed Super Fund (SMSF)

Can farm land be transferred from the farm business into an SMSF?

Yes. Farm land can be either sold to an SMSF or transferred as an in-specie contribution.

If using in-specie contributions, care must be taken not to breach the contribution caps (when combined with all other contributions for the year). These are called:

Concessional Contributions

  • $25,000

Non-concessional Contributions:

  • Age < 65 - non-concessional cap of $100,000 per annum, with ability to bring forward two years of entitlements to make a non-concessional contribution of up to $300,000 at once for a 3 years period.
  • Age 65-74 - Non-concessional cap of $100,000 per annum.
  • Age 75+ - Nil. Super fund cannot accept personal contributions.

Total Superannuation Balance

  • You can only make non-concessional contributions if your total superannuation balance is less than $1.6 million.

Contributions arising from the small business CGT concessions are excluded from bing non-concessional contributions and are limited to the member's CGT cap.

  • CGT cap currently $1,515,000 (2019/20 Financial Year).
  • Contributions covered by CGT cap are:
    • CGT exempt amount (up to $500,000) under the retirement exemption.
    • Capital proceeds from the disposal of active assets that qualify for the 15 year exemption (even if asset was pre-CGT).

These contributions can be made even where the total superannuation balance exceeds $1.6 million.

Where the land is acquired from a related party, it is exempt from section 66 of SISA, as it is considered to be business real property, and is therefore allowed.

  • Transfer must be at arm's length (i.e. market value) under section 109 of SISR.
  • If there is a private dwelling on the property, it must not exceed 2 hectares.

Can SMSF lease land to related farm business?

In general, SMSF trustees cannot lend, invest in, or lease to a related party of the fund more than 5% of the fund's total assets. Such an investment is considered to be an "in-house asset".

An exemption to this rule is where real property is leased to a related party and the property is considered to be "business real property" of the fund. Market value lease must be paid by the related party.

How can Brentnalls Agribusiness help?

At Brentnalls Agribusiness, we have knowledge and experience to help you plan and execute our succession plan. Our objective is to see you and your farming business thrive now and into the future.

If you would like to print this information please click here for PDF format

Disclaimer
The information provided in this information sheet does not constitute advice.  The information is of a general nature only and does not take into account your individual situation.  It should not be used, relied upon, or treated as a substitute for specific professional advice.  We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.
 

Our Services

Services that assist in increasing profitability, build value, and protect your wealth.

Accounting & Tax
Business Advisory
Wealth Creation & Preservation

Industry Focus

We are not just your accountant, we are your business advisor, here to support you and your business. We specialise and focus within the following industries:

Brentnalls Agribusiness
Brentnalls Construction
Brentnalls Health

Resources

Our resources provide additional supporting information in the following areas: 

Newsletters
Fact Sheets
Internet Links
Checklists

Our Location

255 Port Road
HINDMARSH SA 5007

PO Box 338
Welland SA 5007 

View location map

P: (08) 8241 8444
F: (08) 8241 8488
E: admin@brentnalls-sa.com.au

Connect with us on Facebook. Connect with us on LinkedIn.