All investments by your SMSF must be made on a commercial ‘arm’s length’ basis. The purchase and sale price of fund assets should always reﬂect true market value, and the inacome from fund assets should always reﬂect a true market rate of return.
If you don’t comply with the investment restrictions we may impose significant penalties, including disqualifying you as a trustee and even prosecution. It’s a good idea to speak to an SMSF professional to make sure your investments comply with the law.
Several investment restrictions apply to transactions involving ‘related parties’ of your fund and ‘relatives of members’. No one associated with your fund should get a present-day benefit from its investments.
Your fund needs to be maintained for the sole purpose of providing death or retirement benefits to your members or their dependants.
A ‘related party’ of your fund includes: