If a fund trustee is contemplating acquiring land to develop, there are a number of commercial and prudential requirements the fund trustee must consider from both a superannuation and tax law perspective. The investment must also be permitted under the fund's governing deed.
This article is the first instalment in a four part series that will look at the common issues that should be considered by a fund trustee when developing land. This update will focus on the superannuation issues faced by a fund trustee interested in acquiring and developing land directly, including commentary on the debate around whether a fund trustee is permitted to conduct a business, does a land development exhibit the relevant characteristics of a business and at what point will vacant land satisfy the indicia of 'business real property'.
Over the course of the four updates, we will consider the key commercial aspects of entering into a land development and the structuring options, with a focus on how to structure and document a land development project to ensure the best outcome from a commercial and superannuation perspective.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.