18 Sep 08 SMSFs: meaning of "borrow money" etc in s 67 SIS Act - SMSFR 2008/D4This draft Self Managed Superannuation Funds Ruling was released on 17 September 2008 for public comment by 31 October 2008. Its full title is "Self Managed Superannuation Funds: the meaning of 'borrow money' or 'maintain an existing borrowing of money' for the purposes of section 67 of the Superannuation Industry (Supervision) Act 1993".
The draft Ruling states that the prohibition and exceptions in s 67 only apply to borrowings of money. Therefore, for the purposes of s 67, a borrowing is an arrangement that exhibits two necessary characteristics:
- a temporary transfer of an amount of money from one entity (the lender) to another (the borrower); and
- an obligation or an intention on the part of the borrower to repay that amount to the lender (which may be satisfied by the provision of an asset).
For a copy of SMSFR 2008/D4, go here.