International Law

Superannuation borrowing changes

By David Jacobson

The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP, has announced that the Government proposes to amend the Corporations Regulations 2001 to provide that certain borrowing arrangements by superannuation fund trustees permitted by the Superannuation Industry (Supervision) Act 1993 (the SIS Act) are financial products under the Corporations Act 2001.

Only licensed financial services providers will be able to offer these arrangements to superannuation funds.

The Regulations would come into effect three months after being made.

The Minister also announced that the Government proposes to amend the tax law so that a superannuation trustee who enters into a limited recourse borrowing arrangement to purchase an asset, as permitted under subsection 67(4A) of the SIS Act, will be treated as the owner of the asset for income tax purposes.

Treasury has released a discussion paper outlining proposals to amend the income tax treatment of ‘traditional instalment warrants’ and limited recourse borrowings of complying superannuation funds.

Full post as published by Australian Regulatory Compliance Review on March 10, 2010 (boomark / email).