Can an "associated person" (me) loan into my SMSF?

Please can anybody shed light on this question...
With my SMSF i am planning to purchase a commercial property - with cash in the fund + an NAB loan facility (to 70% of purchase costs) + i am also wanting to lend $250K of my money into the SMSF.
Or is there another structure to achieve similar outcome?
thank you

 

this link says - yes
Related Party Loans - SMSF Warehouse

 

I've lending money to my SMSF via a loan agreement. I've also had financial advice on this to ensure it's properly compliant and in the interests of everyone in the SMSF.

Also is the NAB still doing SMSF commercial lending?

 

Hi Peter
thanks for update.
Yes, my understanding via broker is that NAB is lending to SMSFs,
or they will consider doing it on this commercial property anyway.

 

You want to lend on top of the bank lending 70%?
That would probably be not allowable.

 

thanks Terry
who would not be allowing it? the bank or the ATO?

 

both probably

There wouldn't be a market lenders out there who would lend more than 80% LVR.

 

I believe you would also need to ensure your trust deed allows for your SMSF borrowing to acquire property.

 

I don't know about the ATO, but I do know there's lenders that will allow you to lend your SMSF some of the money. You do need to have been making contributions to the SMSF, it's not something you can set up yesterday.

 

You answered your own question property guts.

You can perform a related party loan and the terms are attached here Legal Database. The table under paragraph 7 is the key. Follow that and you will be ok. They one people forget is registering a mortgage.

Note the max LVR is 70%.

Cheers Ivan

 

You cannot combine a related party loan and a bank loan for the same property as the limited recourse facility would be non compliant. The bank lender wouldnt touch it with a barge pole as it would be involved at the time of settlement anyway.

Related party loans are now more complex to setup and maintain and really require extensive legal advice by a SMSF specialist lawyer to ensure that the PCG 2016/5 ruling is complied with from day one and every day thereafter. There are some complexities to related party loans that can later make them illiquid and a problem. ie death

The $250K could be made as a non-concessional contribution ( some concessional ?) but is preserved in the fund. That is far simpler than a loan but still requires some financial advice to avoid breach of caps and to ensure the correct member choice fits with the strategy.