DomaCom supports Court action against ATO over in-house assets

Share this article:

A company is supporting action against the ATO in the Federal Court, seeking a ruling that its investments are not in-house assets.

DomaCom Australian Limited is supporting an action in the Federal Court for a declaration that the ‘DomaCom sub-funds’ are not in-house assets or related trusts for SIS Act purposes. The company is a subsidiary of ASX-listed company DomaCom Ltd, which describes itself as a “fractional investment fund manager”.

“The ruling would confirm that SMSFs can invest in property sub-funds where the tenant of the underlying property is a related party of the SMSF,” said an ASX announcement by the company.

DomaCom CEO Arthur Naoumidis said: “The ability to use superannuation to help people into a home is clearly a topical issue in Australia and it is our belief that the DomaCom Fund can play a key role in solving this issue whilst still protecting the assets of the SMSF. The unique arm’s length structure of the DomaCom Fund protects the SMSF assets whilst generating commercial rates of income and capital return that the underlying residential property delivers.”

“Residential property can be used as an anchor asset class for the superannuation portfolios of Gen X/Y investors which can then expand to other asset classes later in life. The Gen X/Y investors can then rent the property and acquire more of the interest in the related sub-fund as time goes on.”

The ATO has previously been critical of the coverage given to DomaCom. In October 2016 ATO Assistant Commissioner Kasey Macfarlane said: “The use of SMSF property investments as a means of providing residential accommodation to SMSF members’ children and other related parties contravenes the requirement that an SMSF be established and maintained for the sole purpose of providing retirement benefits for members or benefits for their dependants upon death.”

Want to be kept up-to-date with SMSF and Superannuation changes, why not subscribe to our Newsletter?

This article, as with all content on this site, is for informational purposes only, and is not legal, financial, tax or other advice. Please read our Terms and Conditions of Use.

Share this article:

Leave a comment

Your email address will not be published. Required fields are marked *