ATO Interpretative Decision

ATO ID 2001/305 (Withdrawn)

Superannuation

Business Real Property - fishing licence
FOI status: may be released

Withdrawn pending consultation with the Australian Prudential Regulation Authority. This decision as ben reissued as ATO ID 2002/699.

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Whether the Superannuation Industry (Supervision) Act 1993 (SIS) prohibits a Self Managed Superannuation Fund (SMSF) from acquiring a licence to harvest seafood from a related party of the SMSF.

Decision

Yes, the SIS does prohibit a SMSF from acquiring a licence to harvest seafood from a related party of the SMSF.

Facts

The employer-sponsor of the SMSF currently owns a licence to harvest seafood.

The SMSF had previously purchased a similar licence to harvest seafood.

The trustees of the SMSF wish to acquire a licence to harvest seafood from a related party, the employer-sponsor.

The relevant State Government has issued a limited number of these particular licences. These licences are purchased on the open market.

Reasons for Decision

Section 66(1) of the SIS prohibits the trustee or investment manager of a regulated superannuation fund from intentionally acquiring an asset from a related party of the fund. This general prohibition is subject to certain exceptions set out in subsection 66(2) of the SIS. The exceptions are assets which are:

•: listed securities acquired at market value; or
•: the asset is Business Real Property acquired at market value; or
•: assets under a merger between regulated superannuation funds; or
•: assets of a kind which the regulator has stated, by written determination, may be acquired. Listed securities are defined in subsection 66(5) of the SIS to be a share, a unit, a bond or debenture, a right or option or any other security listed on an official stock exchange of Australia or an approved within the meaning of section 470 of the Income Tax Assessment Act 1936 or an exempt stock market within the meaning of section 771 of the Corporations Law.

Business real property is defined in subsection 66(5) of the SIS. Essentially it is any real property, acquired at market value, used wholly and exclusively in one or more businesses, but does not include any interest held in the capacity of beneficiary of a trust estate.

The licence is not currently an asset of another regulated superannuation fund with which the SMSF is merging.

The Regulator has not issued a written determination in respect of this asset.

As the licence does not come within any of the exceptions provided by subsection 66(2) of the SIS, the SMSF is prohibited from acquiring that asset from the related party.

Date of decision: 23 July 2001

Legislative References:
Superannuation Industry (Supervision) Act 1993
   Subsection 66(1)
   Subsection 66(2)
   Subsection 66(5)

Income Tax Assessment Act 1936
Section 470

Corporations Law
Section 771

Keywords
Self Managed Superannuation Funds
SMSF investments
SMSF acquisitions of assets
SMSF business real property
SMSF listed securities
SMSF related parties

Business Line: Superannuation

Date of publication: 8 September 2001

ISSN: 1445-2782

history

	Date:	Version:
	23 July 2001	Original statement
You are here	27 September 2001	Archived

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