Borrowing and lending with your SMSF

Co-founder of the Switzer Report
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Key points

  • There are specific circumstances under which SMSFs can borrow and they can now acquire an asset under a ‘limited recourse borrowing arrangement’.
  • The loan must be for a single asset, or a collection of identical assets with the same market value. A property with one title, or a number of shares in the one company would qualify.
  • Your SMSF is not allowed to provide any form of financial assistance, including loans, to a member of the SMSF or a relative of the member. There are no exceptions to this prohibition.

Your SMSF can borrow money to buy assets like shares and property, providing you access to investments you may not otherwise have been able to purchase. It can also borrow money to fund payments. There are, of course, strict rules governing what and how an SMSF can borrow.

The super laws prohibit an SMSF from borrowing money, except in these specific circumstances:

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