While the return on the money invested does look attractive, there are reasons Fry believes the transaction can’t be done as you propose. Nor does he think it would pass scrutiny from your fund’s auditor.
These include the sole-purpose test. This states categorically that superannuation can only exist to provide you with financial assistance after you retire or reach 65, or for anyone who is financially dependent on you after you die.In super law, when business transactions occur between related parties – in this instance between you and your partner as fund members and you personally as the owner of the land – certain rules must be followed.
While this may seem OK because you are also the landowner, it isn’t, because your super fund is a different entity to you and must be treated as such. What if tenants who rented the shed experienced any problems that required the involvement of insurance claims?