Case Study: Guiding a Couple Through SMSF Property Investment and Diversification
Client
Two existing business clients, a couple in their late 40s.
Husband and wife run a successful business in the health and wellness industry
Financial Position: Combined super balance of $500,000.
Investment Goals: Gain more control over investments and explore property acquisition through SMSF.
Background
The couple approached Alexander Spencer to explore the possibility of purchasing a commercial property using their Self-Managed Super Fund (SMSF).
The primary motivation was to allow the business premises to be rented through the SMSF, effectively paying rent into their own fund rather than to a third-party landlord.
Purpose
To assess whether an SMSF is the right vehicle for purchasing a commercial property while considering other investment options.
Key Considerations: Tax advantages, control over assets, regulatory compliance, and diversification of investments.
Challenge
Ensuring the couple understood the trustee responsibilities and risks associated with managing their own super fund investments.
Addressing regulatory constraints, such as the need to maintain arms’ length transactions between the SMSF and all related parties.
Balancing different investment strategies between property, shares, and cryptocurrency within the SMSF.
Managing timelines for SMSF setup, fund rollover, and property settlement.
Action Plan
Initial Assessment
Evaluated the clients’ superannuation balances, financial position, and investment objectives during a joint discussion with the financial advisor from AS Wealth Advisors, the mortgage broker from AS Mortgage Partners and the SMSF Specialist from Alexander Spencer
Identified potential benefits and risks associated with SMSF property ownership.
Identify opportunities with holding cryptocurrency via a Wallet or exchange and the audit requirements
Education & Compliance
Discussed trustee responsibilities and regulatory requirements.
Addressed ATO concerns regarding investment diversification.
Transferring of assets from members to superfund e.g., what is and what isn’t allowed
Investment Feasibility & Strategy
Conducted a pre-purchase feasibility study.
Examined tax advantages within the SMSF.
Considered funding options, including borrowing arrangements.
SMSF Setup & Property Acquisition
Assisted with SMSF establishment, including legal documentation and trustee appointments.
Instant bank account set up through Macquarie
Guided the clients through the fund rollover process and ensured industry compliance
Execution & Risk Management
Discussed optimal property settlement period (typically 30–90 days).
Ensured proper structuring to comply with the single acquirable asset rule.
Addressed potential risks such as land tax increases and compliance with arms’ length transaction rules.
“Through a collaborative and strategic approach, the Alexander Spencer team—alongside AS Wealth Advisors and AS Mortgage Partners—guided the client from initial SMSF assessment to property acquisition, ensuring compliance, risk mitigation, and alignment with long-term financial goals.”
Results
Tax Efficiency: Clients benefit from lower tax rates (15%) on rental income and future capital gains tax exemption upon sale of the property in retirement
Improved Financial Control: SMSF allows them to direct rental payments to their own super rather than a third party.
Diversification Strategy: Investment discussions help align property ownership with broader investment goals, including shares and cryptocurrency.
Regulatory Compliance: Ensure compliance with ATO regulations and prepare for future audits.
Insurance: Consideration of life, and TPD (Total Permanent Disability) insurance held through existing industry superfunds
Next Steps
Continue monitoring the investment performance and ensuring tax compliance.
Adjust the diversification strategy as the couple’s financial situation evolves.
Provide ongoing advisory services to optimise investment returns and minimise risks.
Impact
The strategy reinforced the importance of SMSFs in business-related property ownership.
Clients gained a deeper understanding of the responsibilities and benefits of SMSF investment.
Enhanced their long-term wealth-building strategy through a well-structured and compliant SMSF.
“The successful acquisition of commercial property through an SMSF not only reinforced the strategic value of SMSFs for business owners but also equipped the clients with greater financial confidence and long-term wealth-building capabilities.”
Services Provided
SMSF Advisory & Setup
Financial & Investment Strategy Planning
Compliance & Regulatory Guidance
Tax Optimisation & Risk Management
Ongoing SMSF Administration & Reporting
Alexander Spencer empowered the client to strengthen their long-term wealth strategy by guiding them through the successful acquisition of a commercial property via their SMSF with AS Wealth Advisors and AS Mortgage Partners.
Alexander Spencer is a financial advisory firm that provides accounting and financial solutions, growing to become an AFR Top 100 Accounting Firm, providing quality business solutions and outstanding advice to all our clients. Alexander Spencer offers a wide-ranging selection of services, designed to meet all our clients’ financial needs. We believe in fostering success through playing an active role in developing and implementing business strategies for our clients.