11/04/2019John is the sole member of his SMSF and is the sole director of the fund's corporate trustee. After seeking financial and tax advice on the benefits of owning a property in his SMSF, John decides to sell his investment property valued at $1m to his SMSF. As his SMSF's available balance is $200k short of the market value, he enters into a contract with the SMSF for a loan of $200k to fund its purchase using a limited recourse borrowing arrangement. In lieu of paying the loan amount to the SMSF, he received $800k as the vendor from the SMSF on settlement, the $1m sale price less his 'loan' of $200k to the fund. But is that $200k really a loan? Jeff Song explains.
11/04/2019With the exception of limited recourse borrowing arrangements ('LRBAs'), trustees of a fund are generally prohibited from borrowing money. LRBAs enable trustees to borrow from a third-party or related-party lender to acquire property. The property acquired is held in a separate trust, which is set-up exclusively for this purpose. In the event of default, the rights of the lender are limited to the acquired property alone.
27/02/2019Mary and John purchased a property in NSW using their SMSF in 2012 under a limited recourse borrowing arrangement. Their SMSF has recently repaid the loan and they are now wanting to transfer the property back to their SMSF. Elizabeth Wang discusses.
27/02/2019John and Mary, a married couple, are members and individual trustees of their SMSF and their benefits in the fund represent 10% (John) and 90% (Mary) of the total value of the fund respectively. John is a foreign person for the purposes of the surcharge duty in NSW. Is the SMSF subject to surcharge duty in NSW? Jeff Song outlines the position.
27/02/2019Many clients complete a Will and then fail to revisit it for years, and it is concerning that some never do. However, an estate plan is not static; it cannot be set and then forgotten about. It is not difficult, or necessarily expensive to change a Will - it can be amended, modified, updated or even revoked at any time. Elizabeth considers the issues.