The ATO released a draft Self Managed Superannuation Funds Ruling – SMSFR 2011/D1.  This ruling discusses the application of two key concepts in relation to Limited Recourse Borrowing Arrangements (LRBAs); what constitutes a “single acquirable asset” and clarification in relation to the distinction between a “repair” and an “improvement” for LRBA purposes.  According to the ICAA, the Commissioner has taken a sensible and pragmatic approach to LRBAs and the realities of investing in real estate.

The ATO is seeking comments on this draft Ruling, so watch this space for further developments in the coming months.  To discuss this ruling on Limited Recourse Borrowing Arrangements in more detail, contact The SMSF Accountant.

**Update – The final ruling has now been released – SMSFR 2012/1.  To discuss the application of this ruling to your Fund, contact The SMSF Accountant today.