When it comes to borrowing money for a Self-Managed Super Fund, the process is quite different from getting a traditional bank loan. Before you begin, it is essential to understand the fundamentals, and for this, we always suggest meeting with your accountant or financial counsellor.
We have helped customers secure financing for residential or commercial property via their super funds.
The SMSF Limited Recourse Borrowing Arrangement is required to borrow money inside the SMSF (LRBA). Before you begin, it is essential to understand the fundamentals, and for this, we always suggest consulting with your accountant or financial counsellor. SMSF loan 360 will help you with your SMSF borrowing requirements and open the door to a new world of investing options.
Requirements for the SMSF Loan to be Compliant
All self managed super fund loans must comply with the regulations set by ASIC. The SMSF trustees need to ensure the borrowing structure is compliant by taking into consideration SISA and other tax rules:
The loan must be a limited recourse loan between the lender and the SMSF.
A commercial loan agreement need to be formally executed if the SMSF borrowing is from a related party.
A custodian/bare trust with a corporate trustee has to be set up correctly. The corporate trustee for the bare trust must be the registered owner of the property or other assets.
Concerns from ATO
The ATO’s concern about the self managed super fund borrowing should be noted:
All loans for self-managed super funds must adhere to Limited Recourse Borrowing Arrangements (LRBA). The SMSF trustees must verify that the borrowing arrangement is compatible with SISA and other tax requirements.