Self Managed Super Fund Loans

Self-Managed Super Fund (SMSF) Borrowing – Peter Reber – First Point Group

Like other superannuation funds, SMSF’s are primarily used to build wealth for retirement. SMSF’s are different from other superannuation funds as all members are also trustees (or trustee directors, if the SMSF has a corporate trustee). Members are responsible for running the fund including the documented strategy for investing the fund’s assets, paying benefits and meeting the administrative and compliance requirements of the fund.

Changes to the Superannuation Industry (Supervision) Act 1993 (Cwlth) and Regulations (SIS Act) during late 2007 allow SMSF’s to borrow money from a Lender to purchase investment assets such as residential & commercial property. This ability to borrow can build on the taxation advantages currently available to superannuation funds (refer to your Accountant) and can help a fund to acquire a larger and more diversified portfolio of investments with a view to successful long term wealth accumulation.

Since early 2008, First Point Group has completed many successful SMSF Loan/Borrowing transactions with Lenders to assist clients in this rapidly growing area including:

• Purchase of an owner occupied commercial building
• Purchase of a waterfront investment home
• Purchase of three residential townhouses
• Purchase of a factory from a related family trust

It is important to note that the ATO have recently advised (9/2011) that SMSF’s will be able to improve properties held within funds, provided that borrowings are not used to renovate. You will need to speak to your Accountant to understand the full ATO implications of this change.

Please contact Peter, Simon or David from First Point Group on 9882 2500 if you would like to learn more about borrowing using your Self-Managed Super Fund.