Updated November 12th 2013

In July 2010, new legislation was passed in respect of borrowings within superannuation funds. There are a number of issues arising from this legislation as follows:

  • Borrowings must be applied for a ‘single asset’, therefore if a strata title has separate title on the carparking space, there may have to be two separate loans
  • A fund could not borrow to acquire land and then subdivide it until the borrowings are fully repaid, otherwise the borrowings are not applied against a ‘single asset’
  • The law requires that any asset purchased in a fund through borrowings is required to be held by a separate trust.

The ATO has now deemed that this trust cannot be a bare trust and therefore separate ABN and GST registration would be required