Can a Trustee Who is a Builder Build a House on SMSF Land?
In the normal course of events, a trustee cannot charge the SMSF for their time performing their duties as trustee. Arguably, this situation also extends to things such as “property management” (eg. collecting rents, inspecting rental properties, etc.) However, the situation is somewhat different where the trustee also operates an independent business in the field for which it is providing services to the fund. For example, a trustee who is an electrician, whose busisness re-wires a rental property owned by the fund. Or, a builder who enters into a contract to build a property on land owned by the fund.
In these cases, there does not appear to be any problem with the trustee’s business charging the fund for its services. However, as with all of these things, the contracts and prices between the parties must be documented in the same manner as they would be between arm’s length parties and the price itself must be an arm’s length price.
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