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Follow on Google News | How to Buy a Commercial Property for your Business through your SMSFBy: Sky Accountants Some advantages of buying commercial property through your SMSF include the tax-effective 15% super income tax rate option and the ability to grow your SMSF faster by paying rent to yourself, which is a good way to pay off your assets. Your business is also a separate entity to your SMSF, increasing asset protection and securing tenancy in your property. Business owners benefit from this structure as they can purchase an office for their business, borrow money within their SMSF and buy it under their SMSF name. The business can pay rent to the SMSF and claim this as a business expense. The SMSF uses the rent to pay off the loan and the rent goes to the SMSF as income. This is also a popular strategy for medical professionals, who likely have a substantial amount in their super that gives them the flexibility to diversify assets into commercial properties. Doctors who work together can purchase medical premises by setting up a unit trust which can borrow money. Each of their SMSFs can hold 33.3% of the units in the unit trust so when they pay each month, the money is deposited into the unit trust and distributed between their SMSFs. They will receive a tax deduction and the rental income in their SMSF will only be taxed at 15%. You would need to set up a bare trust within your SMSF to set up a limited recourse borrowing arrangement to separate a trust that isolates the commercial property investment from other investments. Sign the contract in your SMSF name and set up a commercial lease arrangement with a lease contract at market rates. Make sure your rent is paid each year and your SMSF stays compliant. As you look for different ways to grow and improve your business, seeking professional advice could prove to be an important and helpful decision. You can click here (https://www.skyaccountants.com.au/ End
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