The ATO has published taxpayer alert 2012/7 that focuses on investment decisions to acquire property using a limited recourse borrowing arrangement by the superannuation fund.
In this alert the ATO points out where potential breaches may occur as per following:
- Failure to register title of assets in custodial trustee’s name.
- Signing of contact, before establishment of holding trust for LRBA.
- Breaching single acquirable asset restrictions.
- A related trust acquiring non business real property from related parties or leasing residential property to related parties.
- A related trust allowing assets to be used as security for a member’s loan to buy units.
- Using an LRBA to buy vacant land with the intention to build on that land.
When considering any of the above careful attention must be applied by the trustees to ensure compliance.
REMEMBER, the above are issues that auditors focus on when it comes to the audit of a SMSF. Our audits for funds start from $300 and follow a comprehensive audit plan.
DISCLAIMER: The above is general advice only, you should not act on this advice without consulting a professional adviser to discuss your personal circumstances.