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Limited recourse borrowing arrangements by self-managed super funds - questions and answers

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Scope and purpose of this document

This document provides general guidance on the Australian Taxation Office's (ATO) current views regarding the application of the superannuation law (specifically the Superannuation Industry (Supervision) Act 1993 and related super rules) to limited recourse borrowing by self-managed super funds (SMSFs).

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This document does not deal with tax issues other than general references when discussing the application of the super law.

Last Modified: Thursday, 29 July 2010

Table of contents
Scope and purpose of this document
Matters trustees should take into account
General prohibition on borrowing
Requirements under the super law for limited recourse borrowing by super trustees
Changes to other laws relating to limited recourse borrowing arrangements
The arrangement and refinancing
The loan and the lender
Lenders recourse and charging the asset being acquired
The asset being acquired and replacement assets
The in-house asset rules
The holding trust
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