When borrowing, acquirable asset, repair or altering a property in your Self-Managed Super Fund

Property in self managed super SMSF superbenefit -When borrowing, acquirable asset, repair or altering a property in your Self-Managed Super Fund

Acquirable Asset – Borrowing for SMSF

Aaron Dunn gives a great summary and more common-sense info on the latest ATO self-managed super rules about borrowing, acquirable asset, repair or altering a property in your Self-Managed Super Fund.

He says…If the industry was pleased about the draft ruling on limited recourse borrowing arrangements (LRBA), the final ruling, SMSFR 2012/1 has done nothing to wipe the smiles off trustee & industry faces.  The ATO has taken a practical approach in this ruling to key concepts including:

  • What is an ‘acquirable asset’ and a ‘single acquirable asset’
  • ‘maintaining’ or ‘repairing’ the acquirable asset as distinguished for ‘improving it’; and
  • When a single acquirable asset is changed to such an extent that it is a different (replacement) asset

Much of the industry feedback for the final ruling was to add further clarity and practicality to assist trustees and professionals alike to understand these key concepts. Broadly, I think this ruling has achieved a more than satisfactory outcome for the specific issues.  There does however remain a range of outstanding issues that further clarification, including in-house assets, the concept of the holding trust vs. bare trust amongst others.

Aaron has provided below a summary of his views from the final ruling, SMSFR 2012/1: Limited Recourse Borrowing Arrangements – application of key concepts (To continue with more detail on the three concepts above, go HERE)

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