ato logo
Search Suggestion:

Terms we use

Last updated 3 November 2022

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.

QC26343