Clients Sam and Debbie, both in their early forties, had diversified investments in shares, some rental properties and their family home. They were keen to buy a commercial property and approached us to find out if it was possible to borrow through their existing SMSF.
We reviewed their trust deed and confirmed that it was possible to borrow through their SMSF.
We further explained that there would be quite a lot of legal documentation required to ensure compliance with the ATO and SIS legislation which would include, amongst other things, the setup of a Bare Trust for the borrowing.
We then suggested that Sam and Debbie obtain specific advice regarding their strategy from a licensed financial planner. They also had a meeting with their banker to understand their requirements.
This was not an easy process but at the end of the day, they found a great commercial property that met their retirement strategy goals.
If you are looking to borrow through a SMSF, it’s vital to obtain professional advice before signing a contract to ensure you understand the benefits, risks and costs associated with a SMSF.
Note: These are real case studies of clients we’ve worked with, though we have changed their names to protect their privacy.
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