Business Property Transfer to Self-managed Super Fund


I bought a shop on 25 June 1992 and it cost $188,448. I ran an antique business from the shop until 26 June 2003, when I retired. The shop was then rented to a jeweller. Commencing on 1 November 2007, I transferred one third of the property to my Self-managed Super Fund and the remainder over the next two financial years. The property was independently valued then at $450,000. I am currently aged 73 years and receiving a pension from fund. In each financial year I have been paid for working the qualifying 40 hours within 30 days. The full amount of rent is now paid to my super fund.
I was originally informed, because of it being a business property, I would not be liable for Capital Gains Tax on transfer of the property to my Super Fund. Is this still the situation?


It is certainly still the situation that CGT concessions exist on active business assets that can effectively reduce the tax to zero. But they must be actively used in a business so assets held as a rental property (unless the tenant is an associate) cannot qualify for the active asset concessions. The rule is (section 152-35 (1)) that the asset must be used in a business at least 50% of the time you own it or for seven and a half years whichever is the shortest period. So based on the use before it was rented to the jeweller it appears you qualify. You will be able to utilise the 15 year concession (section 152-105) which allows you to receive the gain of the sale tax free.
I have made quite a few assumptions here about your circumstances so make sure you run this by an accountant who knows all your details before you proceed.

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