Q: We all know what the sole purpose test (SPT) is. However, what I need to know is when the sole surviving or even the youngest member of the fund finally turns 65 does the sole purpose test then become redundant? Consequences for example: if the fund owns a rental property – can family members now live in it? But the main query relates to the role of the SPT once the youngest member attains age 65.
A: Thanks for the question, Paul. This is a common query we’re getting and the fact that we’re getting this question a lot suggests there is still some confusion around the sole purpose test. So hopefully I can assist with that confusion. What I’ve given you here are two very separate ATO regulator references for you. And this pretty much sums up the issue.
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