Self-managed superannuation funds (SMSFs) have become an increasingly popular wealth-building tool for business owners across Australia. For operators in the seafood sector—whether wild-catch, aquaculture, processing, logistics, or retail—an SMSF can provide opportunities to accumulate assets, protect wealth, and support long-term business sustainability.

But the rules governing SMSFs are strict, and the Australian Taxation Office (ATO) monitors compliance closely. Using an SMSF to benefit your business without breaching superannuation law requires careful structuring, legal advice, and ongoing governance discipline.

This article explains how an SMSF can strategically assist a seafood business, the circumstances where it can’t, the asset-protection advantages, and the key risks and considerations business owners should be aware of.

1.What an SMSF Can Actually Do for Your Seafood Business

An SMSF cannot simply “fund your business” in the ordinary sense. It cannot pay your bills, subsidise operations, or provide working capital directly to your fishing, aquaculture or processing entity. The law prohibits an SMSF from providing financial assistance to members or relatives.

However, an SMSF can still play a valuable role in building and protecting the infrastructure around your business, particularly through:

1.1 Ownership of Business Real Property (BRP)

Many seafood operators depend heavily on specialised property assets such as:

• Slipway facilities
• Fish processing sheds
• Oyster or mussel depots
• Cold-storage sheds
• Retail seafood premises
• Maritime workshops
• Aquaculture operations with shore-based infrastructure

Where the property qualifies as business real property, your SMSF can purchase it—either directly or jointly with you—and then lease it to your business at commercial market rates.

Benefits include:

• Your business becomes a secure tenant, paying rent into your SMSF rather than to an external landlord.
• Rent is generally tax-deductible for your business.
• Your SMSF receives that rent taxed at only 15% (or 0% in pension phase).
• The property becomes a protected long-term superannuation asset.

1.2 Limited Recourse Borrowing Arrangements (LRBAs)

Your SMSF can borrow to acquire business property under an LRBA. This allows an SMSF to buy high-value maritime, industrial or aquaculture properties that would otherwise be out of reach.

1.3 Buying Equipment via a Related Unit Trust (with strict requirements)

While an SMSF cannot own most business equipment directly if it is used by a related party, it may invest in a complying ungeared related unit trust, which can in turn hold certain business assets. The rules are extremely restrictive, but where structured properly, this can facilitate ownership of items such as:

• Ice machines
• Forklifts
• Refrigeration units
• Processing machinery
• Vehicles or vessels (very limited circumstances, usually not allowed unless not used privately)

Specialist legal advice is essential here.

1.4 Investing in Industry-Related Assets

SMSFs can invest in managed funds or listed entities involved in seafood supply chains, logistics, or export markets. While this does not directly assist your business, it diversifies your retirement investment strategy into a sector you understand.

2. Asset Accumulation Benefits

2.1 Rent-Driven Superannuation Growth

For seafood operators, paying rent to your SMSF rather than an unrelated landlord transforms rent from a sunk cost into a retirement-saving mechanism.

For example:
A seafood wholesaler paying $70,000 in annual rent can redirect that into their SMSF, compounding tax-favoured growth over decades.

2.2 Lower Tax on Capital Gains

If your SMSF eventually sells the business property:

• After 12 months of ownership, the capital gains tax (CGT) rate is capped at 10%.
• In pension phase, CGT is 0%.

For business owners planning long-term succession or exit from the industry, this is extremely advantageous.

2.3 Accelerated Wealth Accumulation via Contributions

Rent paid to the SMSF stacks on top of normal super contributions:

• Concessional contributions (up to the annual cap) taxed at 15%
• Non-concessional contributions to accelerate property purchases or reduce SMSF debt

Combined, this creates a powerful long-term wealth engine.

3. Asset Protection Benefits

3.1 SMSF Assets Are Protected from Business Creditors

The seafood industry carries higher-than-average exposure to:

• Storm and flood damage
• Biosecurity events
• Market volatility
• Rising input costs (fuel, feed, freight)
• Perishable-goods losses
• Liability events involving vessels or staff
• Contractual risk across supply chains

If your business becomes insolvent, SMSF-owned assets—such as depots, workshops or processing premises—are generally protected under the Superannuation Industry (Supervision) Act. Creditors cannot access SMSF assets, making the fund an effective structure for safeguarding long-term wealth.

3.2 Limited Recourse Borrowing Containment

Under an LRBA, lenders only have recourse to the property itself, not the rest of your SMSF assets, protecting your retirement savings from loan default risk.

4. What You Cannot Use an SMSF For

There are strict prohibitions that seafood business owners must understand:

• No loans from your SMSF to your business (unless extremely specific exceptions apply).
• No financial assistance—your SMSF cannot pay your business expenses.
• No purchasing assets for personal use (e.g., fishing vessels you also operate personally).
• No paying above-market or below-market rent—the lease must be commercial.
• No private use of SMSF-owned assets.

Breaches can lead to substantial penalties, forced asset sales, loss of fund compliance status, and personal liability for trustees.

5. Risks and Negatives to Consider

5.1 Liquidity Issues

Seafood industry real estate is often large and illiquid. If your SMSF needs to pay a pension or settle liabilities, it may struggle to generate cash flow unless the business reliably pays rent.

5.2 Market Volatility

Industrial and maritime property values can fluctuate significantly, particularly in coastal regions prone to environmental change.

5.3 Complex Compliance Requirements

The ATO closely monitors:

• Related-party transactions
• Market valuation of rental agreements
• Proper LRBA structuring
• Arms-length dealings

Seafood businesses often use unique buildings and equipment, making valuation and compliance more complicated.

5.4 High Setup and Legal Costs

Setting up an SMSF, creating a property-holding structure, and establishing LRBAs can be expensive. For smaller seafood operators, the cost may outweigh the benefit.

5.5 Responsibility and Liability as Trustee

As a trustee, you are personally responsible for ensuring the SMSF complies with superannuation law. Failures can lead to personal fines.

6. Governance and Ongoing Management

To safely use your SMSF in connection with your seafood business, owners should implement the following governance measures:

6.1 Annual Independent Property Valuations

Essential to prove rent is commercial and the fund is operating at arm’s length.

6.2 Clear Lease Documentation

A formal, legally drafted lease between your SMSF and your business is mandatory.

6.3 Proper Contribution and Rent Flow Records

The SMSF auditor will require evidence of timely payments at the correct amounts.

6.4 Regular Legal Review of Structures

Especially if:

• The business expands
• You diversify species
• You acquire export licences
• You relocate processing operations
• You restructure ownership

6.5 Trustee Education

Trustees should receive regular updates on:

• SIS Act obligations
• ATO rulings
• Related-party transaction rules
• Industry-specific valuation issues

Good governance prevents non-compliance and keeps the SMSF aligned with long-term family and business objectives.

7. Other Things to Consider

• Succession Planning: An SMSF-owned property can be transferred tax-effectively to children or future directors involved in the seafood business.
• Insurance: Consider life and TPD insurance held within your SMSF to support debt reduction or succession.
• Transition to Retirement: Rent flowing into an SMSF in pension phase can drastically improve cash flow during semi-retirement.
• Estate Planning: Binding death benefit nominations ensure smooth transfer of ownership of SMSF assets.

The more complex your seafood operation—multi-site, aquaculture leases, export-certified facilities—the more important it is to plan ahead.

Conclusion

Using an SMSF to assist your seafood business can be a powerful strategy for long-term asset accumulation, wealth protection and business stability. However, the legal and compliance framework governing SMSFs is strict, and the seafood sector’s unique asset types require specialist valuation, governance and advice.

With the right structure, the right property, and rigorous compliance, an SMSF can transform what was once an ordinary rental expense into a tax-effective wealth generator that supports both your business and your retirement future.