Buying a freehold hotel- motel and residents in super fund.What structure of unit trust do we need to comply with the SIS act to satify the lending facilitly.We have already have smsf,bear trust and business companies as we where informed by our accountant, finanical advisor, broker.
SMSF OVER $320K, LOAN AMOUNT WAS APPROVED until the lender was told about the SIS act, now we are having trouble getting approved structure of companies to satify both asic and ato office. Any information that would assist us pleaseHi there DJ,
Happy to help you but sounds like you have had ‘advice’ – all SMSF loans must comply with the SIS ACt so the lender will be aware of the requirements and the structure will not be relevant to ASIC but will be to the ATO for SIS compliance.
Perhaps provide some further information i.e. what concerns have been relayed so far?
Cheers Ivan
Redwood | REDWOOD | SMSF | PROPERTY | FINANCE
http://redwoodadvisory.com.au
Email Me | Phone MeSMSF - PROPERTY INVESTMENT - WEALTH CREATION AND FINANCE SOLUTIONS
You’ve had advice from everyone except the lawyer. A SMSF can only borrow to acquire a single acquirable asset and the asset must be held on trust while there is a mortgage.
But you are talking about a unit trust being involved. Under reg 13.22C a SMSF can own units in a unit trust under certain condition, one being that there is no mortgage or encumbrance on the unit trust itself.
But if it is a widely held unit trust then it is possible for the unit trust to borrow – if it can find a lender. Your SMSF or associates can have no more than 50% (or 49%) of the units of the trust.
It is likely that the lender knew about the SIS Act, but didn’t know about the borrowing having a SMSF involvement.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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