Let’s say you have a self-managed super fund (SMSF) that owns a commercial property, like an office building. What happens if the SMSF decides to transfer the building to you, the member, because you’ve met the rules to access your super? A recent private binding ruling issued by the ATO (1052313347010: view here) explains how such transfers are treated for GST purposes.

What’s Happening?

Imagine this scenario:

• Your SMSF transfers an office building to you, the fund member, without asking for payment.
• You’ve reached the stage where you’re allowed to take assets from your SMSF (met a condition of release).
• You’re registered for GST and plan to keep renting out the office to earn taxable income.

Key Questions and Simple Answers

1. Is this transfer treated like selling a working business (GST-free)?
   

No.

For the transfer to be GST-free as a “going concern” (like selling a fully operational business):

·         There must be payment or something similar in return.

·         Both parties must agree to the terms in writing.

In this case, no payment is involved. The SMSF is simply transferring the property to you because the rules allow it—it’s not a business deal.

2. Is this transfer taxed like selling something (a taxable supply)?
   

No.

For something to be taxed under GST, it typically requires payment or something similar.

There are special rules for transactions with close connections (associates) without payment, but they don’t apply here because:

·         You’re registered for GST.

·         You’re using the property for business purposes (renting it out for taxable income).

Since these conditions are met, the transfer isn’t taxed.

Why Does Payment Matter?

For GST purposes, “payment” (or consideration) means giving something in return when you receive something. In this case, the SMSF is transferring the property to you as part of its obligations under the trust deed, not because you’re paying for it. The ATO views it as a distribution, not a sale.

What Does This Mean for You?

If your SMSF transfers a commercial property to you:

• It’s not GST-free like selling a fully operational business.
• It’s not taxed, even under special rules for associates.

This aligns with the ATO’s guidance in private binding ruling 1052313347010. If you’re planning a similar transaction, speak to a tax professional. They can help you understand the rules, stay compliant, and avoid any unexpected tax issues.