The Tax Office has released a draft ruling that explains the meaning and practical application of the term business real property as used in the superannuation laws.
The draft ruling explains our interpretation of the various parts of the business real property definition and how they fit together.
Some key points from this ruling are:
- SMSFs or the other entity must hold an eligible interest in real property which can be a freehold or leasehold interest in real property (as owner or lessee) or an assignable or transferable interest in Crown land that is not an interest held as a beneficiary of a trust estate
- the underlying land must satisfy the business use test which requires the real property to be used wholly and exclusively in one or more businesses carried on by any entity.
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