Media: SMSF – Borrowing and limited recourse borrowing arrangements
https://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfs46ehExternal Link (Duration: 2:20)
Paying a member benefit that is due
Your SMSF can borrow money for a maximum of 90 days to meet benefit payments due to members.
The amount you borrow can't exceed 10% of your SMSF's total assets.
Meeting an outstanding contribution surcharge liability
Your SMSF can borrow money for a maximum of 90 days to meet an outstanding superannuation surcharge liability.
The amount you borrow can't exceed 10% of your SMSF's total assets.
Covering the settlement of security transactions
Your SMSF can borrow money for a maximum of 7 days to cover the settlement of security transactions if:
- at the time you entered the transaction, it was likely you did not need to borrow money
- the amount you borrow doesn’t exceed 10% of your fund's total assets.
Limited recourse borrowing arrangements
Your SMSF can use a limited recourse borrowing arrangement (LRBA) to fund the purchase of a:
- single asset
- collection of identical assets that have the same market value.
The asset is held in a separate trust outside of the SMSF. This keeps the other assets of the SMSF protected if the loan defaults.