THE AUDITORS INSTITUTE | FORUM

Archived Forums

When you become a member of The Auditors Institute, you immediately gain access to expertise, advocacy for your profession and peace of mind.

Ask a question in our members-only forum or use the search function to find prior technical discussions on your topic. You can expect a response within 24-48hrs.

Want to become a Member?

Join Now

Already a Member?

Disclaimer

The forum is made available by The Auditors Institute Ltd for the benefit of it’s members only, and its primary purpose is to facilitate education, training, and discussion between members. The information and answers provided within the forum are of a general nature and do not consider any specific circumstances, objectives, financial situation or needs related to the matter/s raised. The responses should not be construed as financial advice, and each Member should seek their own professional advice before making any decisions. The Auditors Institute Ltd and its representatives are not responsible for any actions taken based on the information provided in the forum.

To test this feature, visit your live site.

Ishwar Shrestha

Mar 14, 2024

LRBA Loan and borrower

in SMSF Technical Forum

I was going through a new loan document for the purchse of Commercial property in the SMSF under LRBA arrangement due to settle in . It says the borrower is SMSF eg ABC pty Ltd atf BCD Family Superfund. Not the Bare trust. I was in impression loan should be under bare trust as aborrower & guarantor are directors. SMSF should not be borrower in the loan documents. In fact the Bare Trust, acting as the legal owner of the property acquired with borrowed funds on behalf of the SMSF, is the entity responsible for entering into the borrowing arrangement and holding the property for SMSF. Consequently, it’s the name of the Bare Trust that usually appears on the loan documents, representing the borrower.

Am I missing anything here! Please clerify in this regards.

2 comments

Comments (2)

THE AUDITORS INSTITUTE

Mar 15, 2024

Hi Ishwar

In my view the loan statements and loan documents are always addressed to the SMSF as per your example being ABC Pty Ltd atf BCD Family Superfund. The loan documentation will be addressed to the Superfund and will refer to the bare trust, the trustee of the bare trust and the address of the property that will be used as security. The Superfund is the actual borrower so that is why the loan documentation is addressed to it.

If other forum members have a view, please let the forum know.

Thanks

The Auditors Institute

Ishwar Shrestha

Mar 17, 2024

Replying to

Thank you for clarifying my curiosity.