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  • Terms we use

    Term

    Meaning

    Arm's length

    Investments must be made and maintained on a commercial basis. A test would be whether a prudent person, acting with due regard to his or her own commercial interests, would have agreed to the terms.

    Collectables and personal use assets

    A collectable or personal use asset is an investment in:

    • artwork
    • jewellery
    • antiques
    • artefacts
    • coins, medallions or bank notes
    • postage stamps or first day covers
    • rare folios, manuscripts or books
    • memorabilia
    • wine or spirits
    • motor vehicles
    • recreational boats
    • memberships of sporting or social clubs.

    In-house asset

    An in-house asset of an SMSF, after 11 August 1999, is either:

    • a loan to, or an investment in, a related party of a fund
    • an investment in a related trust of a fund
    • an asset of a fund, other than business real property, that is subject to a lease or lease arrangement between the trustees of an SMSF and a related party of the fund.

    Market value

    It is the amount that a willing buyer of the asset could reasonably be expected pay to acquire the asset from a willing seller if all the following assumptions were made – that the:

    • buyer and the seller dealt with each other at arm's length in relation to the sale
    • sale occurred after proper marketing of the asset
    • buyer and the seller acted knowledgeably and prudentially in relation to the sale.

    Part 8 associate of an individual

    A Part 8 associate of an individual (whether or not the individual is in the capacity of trustee) includes, but is not limited to:

    • a relative of the individual
    • other members of the SMSF
    • if the member is a partner in a partnership, other partners in the partnership and the partnership itself
    • if the partnership mentioned above contains other individuals, the spouse or child of those individuals
    • a company that is sufficiently influenced by, or in which a majority voting interest is held by, an individual and/or their Part 8 associates.

    Related party

    A related party of an SMSF includes:

    • member of the fund
    • standard employer-sponsor of the fund
    • Part 8 associate of a member or standard employer sponsor of the fund.

    Relative

    A relative of an individual means a:

    • parent, grandparent, brother, sister, uncle, aunt, nephew, niece, lineal descendant or adopted child of the individual or of their spouse
    • spouse of the individual or of any other individual referred to above.

    Total super balance

    The value of all of an individual's superannuation interests.

    Transfer

    Includes:

    • acquisition of an asset by way of a contribution to or purchase by the SMSF
    • disposal of an asset by way of a payment of a super benefit or a sale by the SMSF.

    Transfer balance cap

    The maximum amount of capital that can be transferred into the tax-free retirement phase of super.

    Transitional CGT relief

    Provisions that provide relief from the tax consequences for capital gains accumulated before 1 July 2017, where they would have been exempt if realised prior to a fund taking action to comply with the transfer balance cap or changes to the treatment of transition-to-retirement income streams that take effect from 1 July 2017.

      Last modified: 21 May 2019QC 26343