What are in-house assets?
Self-managed super fund members must follow a large amount of investment rules when selecting investments for their SMSF.
One of the rules is the in-house asset rule. An in-house asset is a loan to, or an investment in, a related party of your fund, an investment in a related trust of your fund or an asset of your fund that is leased to a related party.
There are some exceptions, including:
– business real property that is leased between your fund and a related party of your fund
– some investments in related non-geared trusts or companies
– most investments and loans entered into before 11 August 1999.
In-house assets can’t be more than 5 per cent of your fund’s total assets. Certain events will affect the percentage of in-house assets held. You need to continually monitor the value of in-house assets, so you do not break the rules.