The main investment requirements for DIY superannuation are outlined below;
- Investments must be in line with the fund’s investment strategy
It is a requirement that a SMSF has a written investment strategy in place. All investments must be made in accordance with this strategy. The strategy may be altered over time upon the agreement of the trusts members.
- Investments must be at arm’s length
No party may owe or give concessions to an investment that any normal person would be entitled to. Transactions must occur at market value.
- Cannot lend to, nor provide financial assistance to members and relatives
- A fund cannot borrow
Funds cannot borrow except to meet short term liquidity requirements, in which case the fund can borrow up to 10% of its total assets.
- Cannot acquire assets from a related party
There are certain situations whereby exceptions can be made to this last rule.
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