Assets owned before 11 August 1999
Before 11 August 1999, an in-house asset was defined as a loan to, or an investment in, either:
- a standard employer-sponsor of the fund
- an associate of a standard employer sponsor of the fund.
The meaning of in-house assets has since been expanded. However, exemptions apply to certain arrangements your self-managed super fund (SMSF) entered before 11 August 1999.
If your SMSF owns assets that were acquired before this date, you should review your fund's investments to ensure you are complying with the current rules.
For further in-depth information on the transitional rules and examples, see SMSFR 2009/4 Self Managed Superannuation Funds: the meaning of 'asset', 'loan', 'investment in', 'lease' and 'lease arrangement' in the definition of an 'in-house asset' in the Superannuation Industry (Supervision) Act 1993.
Assets treated as in-house assets
From 1 July 2009, if your SMSF had investments with related parties or related trusts, those assets will be treated as in-house assets if they were acquired before 11 August 1999 and you:
- reinvest any earnings or make additional investments in those assets
- pay up any partly paid shares or units.
Reinvesting earnings
If you continued to reinvest earnings or make additional investments or loans after 30 June 2009 on behalf of your SMSF, the additional investments or loans would be in-house assets that count towards the 5% in-house asset limit.
Partly paid shares or units
If you paid up partly paid shares or units after 30 June 2009 on behalf of your SMSF, a proportion of those shares or units would be treated as in-house assets.
To get the formula to work out the reduced value of in-house assets for payments on partly paid shares or units made after 30 June 2009, refer to subsection 71A(3) of the SIS Act.
Assets not treated as in-house assets
Assets won't be treated as in-house assets if they are:
- investments or loans you entered into on behalf of your SMSF before 11 August 1999 and were not in-house assets under the old rules
- additional investments or loans you made between 11 August 1999 and 30 June 2009 which were in line with transitional rules provided at the time
- fund assets subject to a continuous lease or an uninterrupted series of leases between the SMSF and a related party commencing before 11 August 1999.