Non Arm`s Length Lease Agreement

(b) Registered charities and non-profit organisations: the calculation of the gross reduction in revenue would cover most forms of revenue, excluding the income of non-comparators. These organizations may choose to include revenues from government sources as part of the calculation. A popular strategy among business owners is the purchase (or transfer) of their business premises into a self-managed superannuation (SMSF) fund. The commercial property is then leased to the business unit (or individual) as a tenant. This is a great way to use your assets as long as all transactions between the SMSF and related parties are held on arm length and on commercial terms, i.e. you need to put the paperwork in order. The recent experience of accountants and tenants with relatives and relatives shows that rent adjustments must be up to date and correspond to market rents. In some cases, the nearby tenant has not indexed the rent as required by the rental agreement, or the fund has not sought to claim payment of the rent if it is late. A number of court proceedings have shown that the agent of a fund is required to act in accordance with the lease agreement, whether the tenant is a close party or at another time.

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