Featured publications
Featured publications
SMSF loans
A SMSF (Self-Managed Super Fund) is a private super fund that individual trustees manage themselves, as opposed to an industry or retail super fund. This gives SMSF trustees more flexibility and control over how their money is invested.
Trustees of SMSFs are usually prohibited from borrowing money. The exception is for limited recourse borrowing arrangements (LRBA), otherwise known as an SMSF loan.
An SMSF loan is a powerful tool for savvy investors seeking to diversify their portfolio or purchase a residential or commercial property asset within the tax efficient superannuation environment.
How does an SMSF loan work?
An SMSF loan or LRBA involves an SMSF trustee securing a loan from a lender to purchase an asset that is held in a separate trust. This is treated as an investment which generates income that is reinvested into the SMSF.
Only SMSF trustees can secure an SMSF loan. There are strict compliance requirements, so it’s important to understand the ATO standards before taking out an SMSF loan.
What should you consider when taking out an SMSF loan?
An SMSF loan will typically have a higher interest rate and shorter loan term than a home loan. These loans are only offered by certain banks and lenders with a speciality in this area.
Investing via your SMSF can be a tax effective way of investing as before-tax super contributions to your SMSF are taxed as low as 15% and the capital gain can potentially be tax free. However, remember you won’t be able to access the revenue from the investments until you reach retirement age.
The asset purchased through an SMSF loan is used as security in the event of a loan default, which protects other assets held in your SMSF.
Once the loan is paid, the legal title to the asset will be transferred to the SMSF.
Why work with FABE Financial to secure your SMSF loan?
At FABE Financial, we are experienced in securing SMSF loans for SMSF trustees. We can also work with you to determine when to invest inside your SMSF versus outside of your SMSF, depending on your investment strategy and goals. It is recommended that you first speak with your financial planner or accountant to ascertain if buying a property within a SMSF is the most appropriate strategy for you.
SMSF loans
A SMSF (Self-Managed Super Fund) is a private super fund that individual trustees manage themselves, as opposed to an industry or retail super fund. This gives SMSF trustees more flexibility and control over how their money is invested.
Trustees of SMSFs are usually prohibited from borrowing money. The exception is for limited recourse borrowing arrangements (LRBA), otherwise known as an SMSF loan.
An SMSF loan is a powerful tool for savvy investors seeking to diversify their portfolio or purchase a residential or commercial property asset within the tax efficient superannuation environment.
How does an SMSF loan work?
An SMSF loan or LRBA involves an SMSF trustee securing a loan from a lender to purchase an asset that is held in a separate trust. This is treated as an investment which generates income that is reinvested into the SMSF.
Only SMSF trustees can secure an SMSF loan. There are strict compliance requirements, so it’s important to understand the ATO standards before taking out an SMSF loan.
What should you consider when taking out an SMSF loan?
An SMSF loan will typically have a higher interest rate and shorter loan term than a home loan. These loans are only offered by certain banks and lenders with a speciality in this area.
Investing via your SMSF can be a tax effective way of investing as before-tax super contributions to your SMSF are taxed as low as 15% and the capital gain can potentially be tax free. However, remember you won’t be able to access the revenue from the investments until you reach retirement age.
The asset purchased through an SMSF loan is used as security in the event of a loan default, which protects other assets held in your SMSF.
Once the loan is paid, the legal title to the asset will be transferred to the SMSF.
Why work with FABE Financial to secure your SMSF loan?
At FABE Financial, we are experienced in securing SMSF loans for SMSF trustees. We can also work with you to determine when to invest inside your SMSF versus outside of your SMSF, depending on your investment strategy and goals. It is recommended that you first speak with your financial planner or accountant to ascertain if buying a property within a SMSF is the most appropriate strategy for you.