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  • J1 to J6 and J Limited recourse borrowing arrangements

    Did the SMSF have a beneficial interest in any assets that were held on trust as security under a limited recourse borrowing arrangement?

    No

    Leave J1 to J blank. Go to K.

    Yes

    Read on.

    Write at J1 to J6 the value (on 30 June 2017) of assets beneficially held by the SMSF in a trust as security for a borrowing of money under a limited recourse borrowing arrangement, including instalment warrants.

    • The amounts you write at J1 to J6 are the values of the assets held on trust under limited recourse borrowing arrangements and not the amounts borrowed or the amount of outstanding borrowings.
    • Write the value of the outstanding borrowings under the limited recourse borrowing arrangements at V1 in item 16 Liabilities.
    • Do not include the amounts you write at J1 to J6 at any other asset question in Section H.
      For example, if the SMSF holds a beneficial interest in overseas shares on trust under a limited recourse borrowing arrangement, record the value of the shares at J5 and not at P Overseas shares in item 15c.

    Example: Limited recourse borrowing arrangements

    For example, at 30 June 2017, if the SMSF has a beneficial interest in residential land with a market value of $300,000 held in a trust under a limited recourse borrowing arrangement and the outstanding amount borrowed is $100,000, the trustee includes:

    • $300,000 at J1 Australian residential real property
    • $300,000 at J Limited recourse borrowing arrangements
    • $100,000 at V1 Borrowings for limited recourse borrowing arrangements
    End of example

    SMSFs are prohibited from borrowing to invest except in certain limited circumstances. For more information, see Limited recourse borrowing arrangements by self-managed superannuation funds – questions and answers.

    J1 Australian residential real property

    Did the SMSF have a beneficial interest in any Australian residential real property that was held on trust as security under a limited recourse borrowing arrangement?

    No

    Leave J1 blank.

    Yes

    Read on.

    Write at J1 the value (on 30 June 2017) of the SMSF's beneficial interest in residential real property that is:

    • located in Australia, and
    • held in a trust as security for a borrowing under a limited recourse borrowing arrangement.
    J2 Australian non-residential real property

    Did the SMSF have a beneficial interest in any Australian non-residential real property that was held on trust as security under a limited recourse borrowing arrangement?

    No

    Leave J2 blank.

    Yes

    Read on. 

    Write at J2 the value (on 30 June 2017) of the SMSF's beneficial interest in non-residential real property that is:

    • located in Australia, and
    • held in a trust as security for a borrowing under a limited recourse borrowing arrangement.
    J3 Overseas real property

    Did the SMSF have a beneficial interest in any overseas real property that was held on trust as security under a limited recourse borrowing arrangement?

    No

    Leave J3 blank.

    Yes

    Read on. 

    Write at J3 the value (on 30 June 2017) of the SMSF's beneficial interest in residential and non-residential real property that is:

    • located overseas, and
    • held in a trust as security for a borrowing under a limited recourse borrowing arrangement.
    J4 Australian shares

    Did the SMSF have a beneficial interest in any Australian shares that were held on trust as security under a limited recourse borrowing arrangement?

    No

    Leave J4 blank. Go to J5.

    Yes

    Read on.

    Write at J4 the value (on 30 June 2017) of the SMSF's beneficial interest in public shares, unlisted shares, equities and similar financial contracts that are held in a trust as security for a borrowing under a limited recourse borrowing arrangement.

    Do not include:

    • derivatives (include these at O Other assets)
    • a beneficial interest in debt securities that is held under a limited recourse borrowing arrangement (include these at J6 Other).
    J5 Overseas shares

    Did the SMSF have a beneficial interest in any overseas shares that were held on trust as security under a limited recourse borrowing arrangement?

    No

    Leave J5 blank. Go to J6.

    Yes

    Read on.

    Write at J5 the value (on 30 June 2017) of the SMSF's beneficial interest in public and private shares, equities and similar financial contracts that are:

    • traded on overseas stock exchanges, and
    • held in a trust as security for a borrowing under a limited recourse borrowing arrangement.

    Do not include:

    • derivatives (include these at O Other assets)
    • a beneficial interest in debt securities that is held under a limited recourse borrowing arrangement (include these at J6 Other).
    J6 Other

    Did the SMSF have a beneficial interest in any other assets that were held on trust as security under a limited recourse borrowing arrangement?

    No

    Leave J6 blank. Go to J.

    Yes

    Read on.

    Write at J6 the value (on 30 June 2017) of the SMSF's beneficial interest in other assets that:

    • are held in a trust as security for a borrowing under a limited recourse borrowing arrangement, and
    • do not fall within any of the categories in questions J1 to J5.
    J Limited recourse borrowing arrangements

    Write at J the total of J1 to J6.

    If the SMSF reports an amount here, it must also complete:

    • A and B in item 15e Limited recourse borrowing arrangements
    • V1 Borrowings for limited recourse borrowing arrangements in item 16 Liabilities.
    Last modified: 19 Feb 2018QC 51269