The law surrounding the use of warrant trusts to enable a self managed superfund to borrow has been in place since 2007. Many products still fail to take account of not only the SIS Act but also the Income Tax Assessment Act and various stamp duty acts of the States.

The major concern with a warrant arrangement is ensuring that it complies with section 67A & 67B of the SIS Act. Other concerns include the absolute entitlement of the trustee of the self managed superfund to the asset and the stamp duty payable on the purchase and subsequent transfer of the asset. Another major concern is where the individuals either borrow themselves or use their own funds and lend to the SMSF trustee. This is where the non-arms length income provisions of the ITAA97 may apply.

If you have any queries regarding converting your existing trust deed or ordering a new trust please Contact Us.