International Law

Borrowing by SMSF's: ATO Alert on instalment warrants

The ATO's Taxpayer Alert TA 2008/05 "Certain borrowings by self managed superannuation funds ", discusses arrangements under which the trustee of a self managed superannuation fund (SMSF) enters into certain limited-recourse borrowings, which may not meet the conditions in subsection 67(4A) and/or breach other provisions of the Superannuation Industry (Supervision) Act 1993 (SIS Act), as well as related superannuation rules.

The ATO has identified 5 features of such arrangements which may give rise to taxation and superannuation regulatory issues.

Trustees are also reminded that existing fund assets cannot be placed into a limited recourse borrowing without breaching the SIS regulatory requirements.

The Australian Taxation Office is examining these arrangements.

In separate questions and answers on instalment warrant type arrangements, the ATO discusses instalment warrants in detail.

Full post as published by Australian Regulatory Compliance Review on April 07, 2008 (boomark / email).