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Can I pay myself for services provided to my SMSF?

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I have a self-managed super fund and intend to buy a house inside the fund. I will renovate it as I am a pretty good handyman. Will I be able to charge out my services to my SMSF? If that is not possible, if I establish a professional handyman business, then could I charge out my services at a going market rate?

Let’s take your first question and work through the issues as they are instructive for others with SMSFs who might have similar questions. There are a number of tests that operate with SMSFs and you could fall foul of the related party test being a member/trustee of a SMSF and wanting to charge the fund for your services.

Of course, the irony is that you could hire an unrelated handyman to work on your property inside your SMSF but you can’t easily hire yourself.

Lately the tax office has become more flexible and so for professionals such as accountants, financial planners and lawyers, these people could charge their SMSF for their services.

However, if you established a professional business and it looks like it is for the general public and not just for your SMSF purposes, then you could pass the test. I reckon a plumber could engage his own services for property inside his SMSF but a handyman business without any track record could be seen as gilding the lily. But not all is lost as you can apply to the ATO for a ruling on your handyman idea.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Wednesday, February 08, 2012

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