The ATO says it understands that some individuals and organisations are promoting arrangements where SMSF monies are deposited into unit trusts or pooled investment trusts less a management fee. This money is then used to obtain a personal or business related mortgage which results in the SMSF assets being used to provide members with current-day benefits.

The ATO says it is closely scrutinising these lending arrangements. The ATO says such arrangements would breach the sole purpose test as the SMSF is being used for a purpose other than providing retirement benefits for members. According to the ATO, the primary purpose of such arrangements is to enable individuals and any associates to use their super savings, rather than assets held outside the fund to provide assistance to members or relatives.

[LTN 48, 12/3/15] [IT 12/3/15]