Investing in private companies – there’s a few different layers here.
Let’s put our ‘angel investor’ hat on. Let’s say we’re the sharks off ‘Shark Tank’ and we’ve got people asking to invest in their business for 5, 10, or 20% holdings. You can actually be an angel investor with your SMSF. There are also rules around this.
You must be a minority, or 50% or less ownership in that entity, and you can’t be seen on paper to have control, or even have effective control or persuasion over the board. Your decision can’t be the final decision when you own that business or that stuff through Super.
We have clients, and I have even personally invested in businesses that meet these conditions. The benefit of this is that the profit that business, or that investment earns, goes to Super and you’re taxed at 15% or 0% (depending on your circumstances) and it’s fantastic.
You do need to keep in mind that issue of control, especially if you’re looking to go into business and own through Super, you need to keep in mind that you need to relinquish absolute control of that.
So yes, there’s definitely different ways you can do it, and you can invest in friends, businesses, all sorts like that.
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