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Phuong Hoang Thi Ngo

Mar 13, 2023

Refinance loan for LRBA

in SMSF Technical Forum

Please help me your ideas

1/ I did title search for a property that was bought since 2016 under LRBA (WBC) and now see Mortgage under a new bank (Secure Funding PL) on 02/02/2023. Is super law allow do this ? If yes, do I need ask new loan contract and Deed of Loan ? Whether affect Bare Trust? Please guide me what else document I need mention for audit ?

2/ The trustees paid body corporate for the unit property .

Invoice of body corporate show bare trustee name (not trustee of SF name) . Is this also ok or not for audit?

If the unit is in body corporate , do auditor really need to ask support the Certificate of Currency for whole building?

Many thanks

2 comments

Comments (2)

THE AUDITORS INSTITUTE

Mar 14, 2023

Hi Phuong

Yes, a SMSF can refinance an LRBA as long as the requirements of section 67A of SIS are complied with.

This section does refer to a SMSF being allowed to borrow re "money applied to refinance a borrowing (including any accrued interest on a borrowing)".

You would need to request a copy of the loan agreement.

It should not affect the bare trust agreement as that is an agreement between the trustee of the Fund and the trustee of the bare trust.

Re the body corporate invoices many states in Australia just record the trustee of the bare trust as the legal owner so it would then be correct to have the invoice just addressed to the trustee of the bare trust.

Yes, the auditor should request a copy of the certificate of currency re the property insurance to check the name that the insurance is held in and the level of cover.

Thanks

SMSF AAA

Phuong Hoang Thi Ngo

Mar 14, 2023

Replying to

Thanks a lot