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Will the exemption to the in-house assets rule contained in section 71B of the Superannuation Industry (Supervision) Act 1993 (SISA) apply if the lessee continues to rent a bus from the self managed superannuation fund (SMSF) in accordance with the terms of the old lease.

Yes. The asset subject to the lease will not be an in-house asset of the SMSF.

One of the assets of the SMSF is a bus.

The SMSF leases the bus to a related party under a lease agreement entered into prior to 11 August 1999.

Amendments were made to the investment rules of SISA by the Superannuation Legislation Amendment Act 1999 to restrict investments and loans by SMSFs to/in related parties. The amendments apply from 11 August 1999. According to the transitional rules, fund investments and assets subject to leases in place at 11 August 1999 are not subject to the new rules. That is, the assets are not counted as in-house assets, unless they were already included as an in-house asset under the old rules.

As the asset subject to lease between the SMSF and the related party was in place prior to 11 August 1999 the exemption contained in section 71B of SISA applies to exempt the asset from being an in-house asset of the SMSF.