Your shopping cart is empty

On 14 September 2011, the ATO released for public comment draft Self Managed Superannuation Funds Ruling SMSFR 2011/D1 entitled "Self Managed Superannuation Funds: limited recourse borrowing arrangements - application of key concepts".

The draft Ruling explains key concepts relevant to the application of the limited recourse borrowing arrangement (LRBA) provisions, as those provisions apply to a self managed superannuation fund (SMSF) that enters into an LRBA. The LRBA provisions are found in ss 67A and 67B of the Superannuation Industry (Supervision) Act 1993.

The key concepts explained are:

  • what is an 'acquirable asset' and a 'single acquirable asset';
  • 'maintaining' or 'repairing' the acquirable asset distinguished from 'improving' it; and
  • when a single acquirable asset is changed to such an extent that it is a different (replacement) asset.

The draft Ruling says at para 14:

"The money borrowed under the LRBA (and secured by the single acquirable asset) may be applied not only in acquiring the acquirable asset but also in carrying out repairs and maintenance to the asset whether necessary at the time of its acquisition or at a later time."

In contrast, the money borrowed cannot be used to improve the asset.

Media Release Search
Eg. TD 2005/D52 ALL words EXACT phrase WITHOUT words Date range
From To