Geared unit trusts were once the preferred tool for indirect super fund borrowings. Amendments to the in-house asset rules from 11 August 1999 brought an end to this practice, but pre-August 1999 structures received grandfathering protection via transitional rules and are considered by many to be like gold. But these transitional rules end on 30 June 2009. This paper addresses the consequences for super funds, including what:
happens to existing pre-August 1999 unit trusts after 30 June 2009?
Superannuation ‘instalment warrants’ – Tips and traps for documenting and structuring
Author(s): Philip BRODERICK
As the transitional rules for geared unit trusts draw to a close, a new age of direct borrowing by superannuation funds has arrived. Following recent falls in asset values, trustees of superannuation funds are increasingly turning to alternative investments.
This paper discusses tips and traps in documenting and structuring instalment warrant arrangements, including:
trust deeds, loan agreements and guarantees
stamp duty and tax considerations
dealing with the banks
borrowing where there are multiple purchasers
borrowing where property improvement or development is intended.