Superannuation Borrowing Provisions To Be Amended

Some of the uncertainty surrounding the operation of the superannuation borrowing provisions may soon be clarified, as a result of the introduction of the Superannuation Industry (Supervision) Amendment Bill 2010 (Bill) into Parliament on 26 May 2010.

The Bill would repeal the current borrowing exemption in section 67(4A) of the Superannuation Industry (Supervision) Act 1994, and replace this with new sections 67A and 67B.

New section 67A is an updated version of the current section 67(4A), while the new section 67B contains detailed provisions relating to the replacement of an asset, under a borrowing arrangement.

Significant changes to the borrowing provisions include:

• The borrowing must be applied for the acquisition of a 'single acquirable asset'. This requirement is intended to ensure that a borrowing cannot be used to acquire multiple assets, unless they are a collection of identical assets that have the same market value (eg a parcel of identical