I am looking to purchase the building that we have leased for the past 5 years using an SMSF. There are 3 years remaining on the current a lease. I have arranged finance with a 70% LVR, using a LRBA. The property is a 2500 sq-m freestanding industrial / storage facility in western Sydney, with a 600sqm industrial/storage facility on site. The property has development potential, but I understand that the SMSF cannot borrow to make improvements. I have a number of questions. 1. Can a related party tenant sublet, a portion of a freestanding industrial/storage facility, also to be used as an industrial/storage facility, if the owner maintains borrowing under a LRBA? Does this change the single acquirable asset test? 2. Are leasehold improvements by the tenant, such as office fit-out to an industrial facility, allowed where the SMSF owner maintains borrowing under a LRBA? 3. If a tenant makes significant leasehold improvements to a freestanding industrial/storage facility, including an extension of the factory & storage area, does this change the single acquirable asset test if the nature the complex is maintained as an industrial/storage facility. Basically, the tenant (my business) would look at subletting an unused portion of the land, to increase profit. If this was successful, we (the business) would look to extend the current factory to sublet at a higher rate. But only if the business could secure an arm's length, long-term lease from the SMSF landlord. 4. If at the expiry of the lease, the ownership of the leasehold improvement, office fit-out and/or extension of the facility, reverts back to the SMSF owner, without payment or consideration, does this change the nature of the single acquirable asset if the SMSF owner still maintains borrowing under a LRBA? What are the in-house asset implications of this? 5. Does the identity of the tenant making the alterations or additions affect the result of a different asset test? 6. Do any of the above answers change if the tenant is a related party or not? 7. What are the implications if any, if the SMSF owner of a property, with leasehold improvements made by a related party tenant, sells the property with the lease in place, at market value, if the tenant is a still a related party. 8. What if a related party tenant, who has made leasehold improvement, sells the business and assigns the lease, to a non-related entity, and some time later the lease expires, and the ownership of leasehold improvement reverts to the SMSF property owner, without payment or consideration, would this be considered an in-house asset acquisition? Thanks in advance for your consideration.