What can my SMSF invest in?

The most common types of investments founds in SMSF’s include:

• Cash management accounts.
• Term deposits. Managed funds (Australian and international).
• Listed Australian shares.
• Listed unit trusts (property, investment).
• Listed investment companies.
• Overseas listed shares.
• Residential property.
• Commercial property.
• Industrial property.
• Property purchased with borrowed funds (limited recourse borrowing).
• Property partnerships with non-related parties.
• Shares in private companies with non-related parties.
• Options, warrants, CFDs and other “exotic” investments – these assets are permissible with the proper investment strategy.

There are some investments that are strictly prohibited inside a SMSF. Your SMSF cant;

• Cannot lend money or provide any financial advantage to a member, a relative or associate of a member.

• Cannot borrow except in limited circumstances.

• Must limit investments in, or loans to, ‘related parties’ to 5% of the market value of the fund.

• Cannot buy assets from a member or a relative or associate of a member except for business real property. The exemption for off-market transfers of listed securities and widely held managed funds no longer applies. The new rules state that where a market exists, the purchases must be made on market.

If you’re unsure what your SMSF can and can’t do then please feel free to call;

Cayle Petritsch
SMSF Specialist Advisor
T: 02 9984 7774
E: caylep@nac.com.au

Martin van der Saag
Director
T: 02 9984 7774
E: martinv@nac.com.au