11 Apr 2019 Limited recourse borrowing arrangements
A limited recourse borrowing arrangement (LRBA) involves an SMSF trustee taking out a loan from a third party lender. The trustee then uses those funds to purchase a single asset (or collection of identical assets that have the same market value) to be held in a separate trust.
Any investment returns earned from the asset go to the SMSF trustee.
You can find general guidance on the ATO’s current views about the application of the super law to limited recourse borrowing by SMSFs here.