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Special SMSF Topics: Limited recourse borrowing arrangements - Theory & Case Study


Ordinarily super funds cannot enter into creditor/borrower type arrangements. However, one way in which a super fund can effectively borrow money that at law does not involve this type of relationship is a limited recourse borrowing arrangement (LRBA).

The LRBA rules in the SIS Act were amended with effect from 6 July 2010 for transactions put in place after that date. This session predominantly provides an outline of the rules applicable for LRBAs entered into after 6 July 2010.

Topics covered in this session include:

  • The benefits of holding real estate in superannuation
  • The detriments of LRBAs
  • SIS Act provisions
  • ATO guidance
  • Lender security and who can be a lender
  • The types of assets that can be acquired and how that asset must be held
  • Related party loans
  • Other superannuation law and tax considerations
  • Repaying the loan

 

Learning Outcomes

Upon completion of this topic participants should be able to:

  • Understand the structure of LRBAs
  • Detail the acceptable terms of related party LRBAs
  • Outline other super law considerations
  • Consider some tax considerations of LRBA arrangements
  • Understand how to unwind an LRBA

Tony Negline CA

Superannuation Leader, Advocacy and Professional Standing

Tony has been involved in the financial services industry for over 30 years. For over 13 years he has written a weekly financial services column, primarily about SMSFs, for The Australian newspaper. He is also author of The Essential SMSF Guide, published by Thomson Reuters and endorsed by CA ANZ.


EVENT DETAILS


Topic: Financial Advisory and Superannuation

Sub-Topic: Self-Managed Superannuation Funds, Superannuation

Format: Recorded Webinar

Proficiency Level: Foundation, Intermediate

CPD: Upto 3 hours