How does a SMSF limited recourse borrowing arrangement work?

This short video explains how a SMSF limited recourse borrowing arrangement works in accordance with section 67A of the Superannuation Industry (Supervision) Act 1993.

This is the first of many short videos that I will start producing on various SMSF topics and strategies can be used.

Let me know what you think by rating the post!!

Last chance to register for SMSF Limited Recourse Borrowing Webinar

I am pleased to advise that the next SMSF InPractice Webinar will be on the hot topic of Limited Recourse Borrowing Arrangements.

With the recent release of the much publicised draft SMSF Ruling, SMSFR 2011/D1, this webinar is not to be missed as we explore the impact of the Commissioner’s changing views surrounding some of the key concepts with Limited Recourse Borrowing Arrangements.

Find out more details about this webinar and how to register.

Will improvements create greater risks for SMSF borrowing?

The recent positive news in SMSFR 2011/D1 to be able to improve an asset acquired using a limited recourse borrowing has been widely applauded within the industry.

Clarity to improve an asset with the cash resources of the SMSF to the extent that the asset does not become a different asset, has already sparked significant re-interest in SMSF borrowing.

Whilst I have been a strong advocate of the SMSF limited recourse borrowing strategy, I do have some concerns that this change in view by the Australian Taxation Office may instigate trustees taking on greater levels of debt to allow the SMSF to use its cash to undertake improvements.  Whilst these improvements should arguably improve the overall value of the property, it is the ongoing cash flow issues that may see some trustees come unstuck.  With lower concessional contribution caps from 1 July 2012, the effectiveness of the strategy due to the level of debt may further pose problems (as the fund may require non-concessional contributions to continue to service the loan).

I just wonder whether this change will see some SMSF Trustees take the “Polly and Waz” approach to their retirement funding and use a limited recourse borrowing arrangement to buy, renovate (without creating a different asset) and sell property as part of their retirement strategy?

The launch of the SMSF Academy

Yesterday was a landmark day for me both personally and professionally, with the official launch of The SMSF Academy.  This launch coincided with our inaugural training event in Sydney, the SMSF Limited Recourse Borrowing day.

It was a resounding success, with extremely positive feedback about the quality of content, presenters, and tools to assist practitioners from across the financial planning, accounting and audit professions on the topic of SMSF borrowing.

Read our media release about our launch.

I am looking forward to tomorrow’s limited recourse borrowing day in Melbourne.  For your last chance to register, visit The SMSF Academy website.

See today’s media coverage about the launch of the SMSF Academy:

SMSF Limited Recourse Borrowing day receives 7.5 CPD points from SPAA

This event is a SPAA endorsed Continuing Professional Development Event

I am pleased to advise that we have today received confirmation that the SMSF Limited Recourse Borrowing day is now an endorsed Continuing Professional Development event and has received 7.5 CPD points from the SMSF Professionals Association (SPAA).

Find out further information about the SMSF borrowing day.

Last chance to register for these events next week!!
(C) The SMSF Academy 2012
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