Buyers Agents for small developments?

This is different to what you said above. A fund cannot borrow to improve or change a property - even from a 'non-financier' such as a member.

It is possible to do something like this but the fund could not borrow from a related party.

you must also consider the legal issues of the asset becoming a different asset. Subdivision into different titles is not possible while there is a borrowing arrangement in place as it would result in different assets.

You should seek legal advice - forget calling the ATO for anything but a general guide (which should be treated with caution)

 

^^^ what he said. Changing the asset whilst an LRBA is in place is a no no. You could certainly buy house with development potential, wait for 10-20 yrs of contributions for the loan to be paid out then possibly develop once you own it for cash but changing assets whilst the LRBA is out as far as my understanding goes read this article in its entirety (especially section on different assets)

SMSFs and limited recourse borrowing arrangements - Self Managed Superannuation Funds Ruling SMSFR 2012/1

 

Best to read SMSFR 2012/1 itself - straight from the ATO (their interpretation of the law)

See table 2. Item 1 and then read paragraph 138 onwards
https://www.ato.gov.au/law/view/document?Docid=SFR/SMSFR20121/NAT/ATO/00001

 

Will pm you . Cheers

 

Improvements using money not borrowed
While borrowings under an LRBA cannot be used to improve a single acquirable asset that is the subject of the LRBA, the ATO says money from other sources could be used to improve (or repair or maintain) that asset. However, any improvements must not result in the acquirable asset becoming a different asset. Remember that an improvement to an asset using money from other sources may have excess contribution implications for the SMSF members as it will effectively increase the capital of the SMSF: see Ruling TR 2010/1 here.

 

Yes that is correct. Subdividing would result in different assets.