For several years now, the ATO has allowed Self Managed Super Funds (SMSFs) to use the borrowed monies to purchase a single asset, or a collection of identical assets that have the same market value.
The SMSF trustees receive the beneficial interest in the purchased asset but the legal ownership of the asset is held on trust (the holding trust). The SMSF trustees have the right to acquire the legal ownership of the asset by making one or more payments.
Any recourse that the lender (or other party) has under Limited Recourse Borrowing Arrangements (LRBAs) against the SMSF trustee is limited to the single fund asset (including rights to income) which protects the rest of your super balance should a significant drop in value occur.
Cube Finance Group is skilled in working with lenders that lend to SMSFs and will assist you with the specific paperwork and structures required in these cases.
In one case, we recently assisted two business partners secure a commercial office space where they utilised borrowing in their self-managed super fund to buy the premises.
As part of our service, we sourced the most appropriate lender for our clients in this scenario and navigated the clients through the credit and documentation processes to ensure the experience was as seamless as possible.
At the same time we negotiated a great interest rate and fee structure for this proposal. The clients were very pleased with the outcome. It represented the fulfilment of their goals to own business real property as a part of their Self Managed Super Fund and to remove the landlord of their office premises.
Talk to us today to receive assistance with your SMSF.