Dear Anonymous, your statement "and there ladies and gentlemen is the stupidity of our superannuation system" needs to be reviewed. The rules are there to protect the superannuation assets, and they appear to have worked in this case. If the property were leased to a third party the super fund would not be affected, as the daughter is paying market rates anyway. Likewise, the daughter is not affected as she would be paying market rate as she is now. So the SMSF is not helping the daughter in anyway, just creating a compliance issue (if we allow this sort of behaviour then you can bet the house that people will abuse it. Likewise, if the daughter can't pay the rent later on, will the SMSF trustee evict her with the same gusto it would a third party? Probably not.-that's why related party transactions cause problems.).

Likewise, " yet it sits there doing nothing" is not correct. If the money is in cash it is because the trustee's have decided (through thought or inaction) to have it in cash. It is not the responsibility of the trustee's to apply the money where it urgently needed, it is their responsibility (also known as the sole purpose) to provide the members with a retirement benefit. If these urgent areas provided a suitable return, then the trustee could choose to invest their money there. If these areas provided an uncertain return, then why would you ask mum and dad's to put their retirement at risk?

If society wishes for these monies to be used for urgent issues, then make it safe and attractive for these monies to be used in that way. The problem is that it is too risky and the cost to reduce the risk too great.

One final note, we don't have an affordable housing issue in Australia. We have a I can't find an affordable house in the area that I want to live problem.There are plenty of houses in Australia to buy, people just need to be prepared to move to them.

“The case is interesting in that it shows the Commissioner was prepared to use his powers to deem an asset to be an in-house asset if it otherwise was not an in-house asset". "The Court also recognised that acquiring an investment with the intention of it being leased to a relative, even on the same terms as other tenants also breached the sole purpose test..." and there ladies and gentlemen is the stupidity of our superannuation system. Having a fund interposed in a relationship like this does, as it should, prevent the integrity of the super system being compromised whilst enabling our superannuation money to be used both for return and for utilitarian purposes. The total cash pool of super in Australian is the world's second largest, yet it sits there doing nothing when even a very small percentage could be applied where it is urgently needed, in areas such as affordable housing, renewable energy and investment in Australian agriculture.