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CASE STUDY: Turning Dreams into Reality: Building a Medical Practice with Your SMSF


Imagine you're a successful medical specialist, and you dream of having a state-of-the-art medical clinic to run your practice. Sounds like a lofty goal, right? Not for Kristie and Sophia*, both in their late 30s, who turned their dream into reality by leveraging their self-managed superannuation funds (SMSFs).

We'll take you through their inspiring journey of using SMSFs to build their medical practice premises and achieve their long-standing ambition.


The Challenge

Kristie and Sophia were already running a prosperous specialist medical practice partnership. They were in a unique situation, each having their SMSF with substantial investments. Their dream was to create a brand new medical clinic, but they faced a financial challenge. They didn't have enough cash in their personal savings to buy property, but when they combined their SMSFs, they had enough capital to make their dream a reality.

The challenge here was finding a way for two separate SMSFs to invest in a unit trust, allowing them to borrow money to purchase land and construct the clinic. This strategy had to ensure compliance with in-house asset rules, which are critical in managing SMSFs effectively.

The Solution: Uniting SMSFs through a Unit Trust

To address this challenge, Smart Business Solutions and Smart Private Wealth set up a unit trust with each of their SMSFs owning units. The SMSFs collectively invested in a substantial number of units within the Unit Trust, allowing them to buy the land outright. After this, the unit trust secured a loan from a bank to undertake the development of the medical clinic. This creative solution enabled them to fund the construction without draining their SMSFs or personal savings. Once the construction was complete, the medical business rented the premises from the Unit Trust at arm's length rates, ensuring a fair return on investment.

The Outcome: Dreams Realised

Thanks to their innovative approach, Kristie and Sophia were not only able to achieve their dream but also now own a cutting-edge medical clinic through their SMSFs. This strategy allowed them to control the property, ensure compliance with SMSF regulations, and generate rental income through their medical practice. They are not just successful medical professionals; they are savvy business owners whose stories are a testament to the power of creative financial strategies. 

*names have been changed to protect client privacy.

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