The final word from the ATO on limited recourse borrowing arrangements

This Ruling explains the following key concepts relevant to the application of the limited recourse borrowing arrangements under sections 67A and 67B of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act):

1. what is an 'acquirable asset' and a 'single acquirable asset';
2. 'maintaining' or 'repairing' the acquirable asset as distinguished from 'improving' it; and
3. when a single acquirable asset is changed to such an extent that it is a different (replacement) asset.

The superannuation law permits a borrowing arrangement if the money borrowed is applied for the acquisition of a single acquirable asset and that asset is held in a holding trust. The fund trustee acquires a beneficial interest in the asset and the right of recourse of the lender in the event of default is limited to the acquirable asset held in the holding trust. By making one or more payments after acquiring beneficial ownership the fund trustee has the right to acquire legal