Limited recourse borrowing arrangements have held their ground within the portfolios of SMSFs, but are still less than 1 per cent of all residential property assets.

A loophole that leaves intermediary LRBA loans outside of the total super balance add-back provisions has been exposed, but should not be exploited, according to an SMSF legal expert.

The six-month loan relief period provided to SMSFs by related-party lenders in line with the Australian Banking Association’s commercial loan COVID-19 relief criteria has been extended by four months.

SMSFs should not overlook the changes to the safe harbour interest rate when reporting COVID-19 loan relief linked to related-party LRBAs.

Trustees purchasing property through limited recourse borrowing arrangements (LRBA) should confirm in what order key documents should be signed for that state, an SMSF legal expert says.

SMSFs looking to use an LRBA to develop property can do so, but only using a complex trust structure that requires arm’s-length arrangements.

SMSFs looking to use an intermediary LRBA must tell lenders they are using a holding trust or risk the possibility of breaching in-house asset rules.