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

Can an SMSF trustee acquire more than one real property title under a single limited recourse borrowing arrangement?

Arrangements entered into on or after 24 September 2007 and before 7 July 2010

Yes. More than one asset may be acquired under a particular arrangement.

Arrangements entered into on or after 7 July 2010

Multiple real property titles cannot generally be acquired under a single limited recourse borrowing arrangement. However, acquisition under a single limited recourse borrowing arrangement may be possible if it is reasonable to conclude that what is being acquired is distinctly identifiable as a single asset. Factors relevant in determining if this is the case are set out at paragraphs 12 and 13 of self-managed super funds ruling SMSFR 2012/1 - Self-Managed Superannuation Funds: limited recourse borrowing arrangements - application of key concepts.

For more information, refer to SMSFR 2012/1 - Self-Managed Superannuation Funds: limited recourse borrowing arrangements - application of key concepts.

Sections within The asset being acquired and replacement assets

• Is an SMSF trustee allowed to acquire the underlying asset from a related party vendor?
• Does the requirement that the asset be held on trust for the SMSF mean that the fund acquires an asset from a related party on repaying the borrowing?
• Is an SMSF trustee allowed to put an existing fund asset into a limited recourse borrowing arrangement?
• Can an SMSF trustee borrow under a limited recourse borrowing arrangement to build a house on vacant land owned by the fund?
• Under the super law can cash, representing borrowed money and/or a deposit, be transferred to the holding trust trustee?
• Can the holding trust trustee operate a cash account for an arrangement entered into on or after 7 July 2010?
• Are SMSFs permitted to use a limited recourse borrowing arrangement to buy a spread of blue-chip shares or is a separate borrowing required for each shareholding?
• Can an SMSF use a limited recourse borrowing arrangement to purchase exchange traded options over shares?
• Can assets be sold and bought on behalf of the investor within the holding trust of a limited recourse borrowing arrangement?
• Can shares issued under a dividend reinvestment plan be retained in the arrangement?
• Can an SMSF trustee acquire more than one real property title under a single limited recourse borrowing arrangement?