Since August 2007 it has been possible for superannuation funds to borrow to acquire permitted assets such as investment commercial properties.

With the recent volatility of the share market it may be that a business operator could use his superannuation fund and borrowed funds to acquire say, business premises from which he will operate the business, which would not have been possible without the ability to borrow. The asset must be held in trust through a separate trust structure so that the trustee of the superannuation fund holds the beneficial ownership and has the right to acquire the legal ownership on making payments. Commercial rent would be charged, which would be income to the superannuation fund after meeting any expenses such as rates and the superannuation fund trustee makes the interest payments on the loan.

To avoid the possibility of capital gains tax and stamp duty issues and to ensure that the structure applies with the superannuation law, it is important that professionally drawn documents are used and we can assist in this regard.

Contact Trevor Kuhle for further information...