Dealings by SMSFs with related parties are a potential minefield due to regulatory and tax rules which regulate, prohibit or tax an SMSF that conducts such activities. However, if structured correctly, related party transactions can create great opportunities for SMSFs and related parties alike. This paper attempts to navigate this minefield by covering:
- The prohibition against assets from related parties
- The prohibition against providing financial assistance to members
- The in-house asset rules as they apply to loans and leases
- The arm's length dealing requirements
- The sole purpose test
- The non-arm's length income rules.