The superannuation system provides several benefits when it comes to a self-managed superannuation fund (SMSF) owning farmland. These include asset protection and the management of estate planning risk. However, the overriding advantage is that it provides a tax-effective environment to help build wealth. In most circumstances, a superannuation fund will be taxed at a maximum rate of 15%, and in certain instances its income will be tax-free.
- A SMSF can use a Limited Recourse Borrowing Arrangement (LRBA) to acquire farmland
- Problems may arise if buying land which is spread across multiple titles
- Funding can come from a related party