SuperUpdate December 2011

Draft SMSF Ruling - Limited recourse borrowing arrangements

We have recently issued draft SMSF Ruling SMSFR 2011/D1 - Self Managed Superannuation Funds: limited recourse borrowing arrangements - application of key concepts.

This draft ruling explains important concepts about limited recourse borrowing arrangement (LRBA) provisions as they apply to SMSFs. The key concepts explained are:

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

Refer to SMSFR 2011/D1 Self Managed Superannuation Funds: limited recourse borrowing arrangements - application of key concepts, which was published on 14 September 2011.