SUPER CONCEPTS PTY LTD
Borrowing via your SMSF - Instalment Warrant
Section 67 (4A) now provides an exception to the superannuation borrowing
restriction. This means that a superannuation fund trustee is not prohibited from
borrowing or maintaining a borrowing, under an arrangement where the money
is, or has been applied for the acquisition of an original (new) asset, as long as
the asset is allowed under the rules of the SIS Act.
Section 67 (4A) provides specific details of the exception for Instalment
Warrants. Instalment Warrants utilized in this manner enable the self managed
super fund to purchase a range of assets including property, shares and other
After consideration and advice from your Accountant, Financial Planner and
Solicitor you have decided to purchase an asset via a borrowing arrangement
through your SMSF.
Super Concepts provides a set of documentation to facilitate trustees of SMSFs
to utilize the borrowing exception provided by Section 67 (4A).
Documents and services provided include:
• Declaration of Trust
• Instalment Warrant & Loan agreement
• Equitable mortgage documentation
• Information Memorandum
• Required Minutes
• Technical backup and support
Borrowing via your SMSF Guidelines Page 1 of 3
Trustees of SMSFs should consider and complete the following prior to
purchase of the asset under the instalment warrant arrangement:
• Trustees of SMSF hold meeting to determine and approve use of
borrowing exception under Section 67 (4A), together with completion of
• Trustees should review the trust deed to be satisfied it allows for the
borrowing arrangement. You may need to seek advice and if required
arrange for a deed upgrade
• Trustees formulate and implement necessary changes to investment
strategy, including risk management, and instalment warrant use
• A trust needs to be established to hold the investment including identifying
who is going to be the trustee of that trust.
Note: Super Concepts documentation includes establishing a bare trust.
Trustees of the bare Trust should be different to the trustees of the SMSF.
• The SMSF trustees need to determine how the investment is to be
financed and by which lender. E.g. Financial institution or related party, etc
• Now you have the ability to purchase the asset
Below are the steps to use borrowing to purchase a property
via your SMSF
• SMSF trustees find a property to purchase in accordance with the
Investment Strategy of the fund.
• Trustees of the Bare Trust arrange for exchange of contract and sign the
contract to purchase the property.
• SMSF trustees arrange for payment of the property deposit
• SMSF trustee should take out a cover note to insure the property from the
date of the contract.
• SMSF trustees are responsible for ensuring all documentation is
completed and ready for the property settlement.
Note: SMSF trustees would usually seek assistance from a solicitor or
conveyancer in relation to the purchase of the property.
Borrowing via your SMSF Guidelines Page 2 of 3
• SMSF trustee arranges financing from a lender. Where the lender is not a
related party, and is a major financial institution then it is likely that they
will have their own mortgage documentation for completion in addition to
the documentation provided by Super Concepts.
• Super Concepts Instalment Warrant Application Form is then completed in
full by authorizing party and sent to Super Concepts for preparation and
forwarding of necessary documentation.
• A cheque for $2200 in favour of Super Concepts Pty Ltd should
accompany the application.
• At settlement, the lender and SMSF trustees will provide their proportion
of purchase price amount.
Ongoing management and maintenance of the property is the responsibility
of SMSF trustees.
All rental/lease income should be banked into the SMSF bank account, and
all expenses in relation to the property paid by the SMSF.
All accounting requirements in relation to the Instalment Warrant will be
carried out within the SMSF by the accountant/administrator who is
responsible for the year end accounting, compliance and audit work.
If you have any questions in relation to the operation of the Instalment Warrant
arrangement and/or the Super Concepts documentation package, please contact
our toll free Technical line on 1800 625 644.
GENERAL ADVICE: Super Concepts Pty Ltd ( ABN 67 007 437 907 ) is a Corporate Authorized
Representative of ING Financial Planning Pty Ltd ( ABN 18 003 318 330, AFSL 2060520 ). To the extent
that these guidelines contain any advice, such advice is of a general nature only and has not taken into
consideration any individual circumstances. Therefore, it should not be relied upon as applying to your
personal circumstances. We recommend that professional advice specific to your personal circumstances
be obtained prior to making any investment decision.
Borrowing via your SMSF Guidelines Page 3 of 3