Hi Forumites
This is a question for clever Accountants, Brokers or Solicitors out there. Is anyone aware of any lenders that will refinance loans to a unit trust where all the units are owned by a SMSF? This was the setup pre 2009 and has now changed.
Any info is appreciatedWho is the borrower?
If it is the trustee with the aim to redeem the units then maybe. But if it is any other way then I think not as the unit holders would generally be required to give personal guarantes.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terryw wrote:Who is the borrower?If it is the trustee with the aim to redeem the units then maybe. But if it is any other way then I think not as the unit holders would generally be required to give personal guarantees.
The setup is as follows
1) There is a corporate Trustee – A non trading Company say XYZ Pty Limited
2) There is the Unit Trust say XYZ trust
3) there is the SMSF – which is stand alone IE has a separate corporate Trustee ABC Pty Limited ATF ABC super FundThe Borrower is XYZ Pty Limited as Trustee for XYZ Unit Trust (that is the case now) and it is not proposed to change that.
Personal Guarantees from the Directors of XYZ Pty Limited are available as is the case now
The issue from the lenders appear to have is that as all units in the Unit Trust are owned by the Super Fund they are saying its a Super Fund loan ??
Although you have given me an idea – what if the super fund was to borrow to buy the units in the Unit trust – but then No as it already owns all the units issued – and to purchase the properties back out of the unit trust into the super fund would probably trigger CGT and stamp duty implications plus would it be deemed an arms length arrangement (indeed would it need to be).
So I think the simple solution is are there any lenders out there that would lend to a unit trust ?? Any Ideas??
Thanks
I did one loan years ago to a unit trust. The daughter had bad credit, so set up a unit trust with mum as trustee, daughter sole unit holder. It got through without them checking.
But I think generally they would require personal guarantees from the unit holders as well as the directors of the trustee.
So, who are the unit holders? ie who is the trustee of the superfund? If it is a company, then you could possibly get away with the lender knot knowing there is a superfund involved. The smae for a person as trustee too maybe. But, they could ask for tax returns etc of the unit holder.
Also I havne't looked into this, but there may be a requirement under the new AML legislation to declare any trusts involved.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi
Whats the security for the loan? Is it resi or commercial?
MikeF wrote:HiWhats the security for the loan? Is it resi or commercial?
Its Resi – 60% LVR
Terryw wrote:I did one loan years ago to a unit trust. The daughter had bad credit, so set up a unit trust with mum as trustee, daughter sole unit holder. It got through without them checking.But I think generally they would require personal guarantees from the unit holders as well as the directors of the trustee.
So, who are the unit holders? ie who is the trustee of the superfund? If it is a company, then you could possibly get away with the lender knot knowing there is a superfund involved. The smae for a person as trustee too maybe. But, they could ask for tax returns etc of the unit holder.
Also I havne't looked into this, but there may be a requirement under the new AML legislation to declare any trusts involved.
Terry
Unit holder is the Super Fund
Trustee is a Non trading Company IE Corporate Trustee
Its all in the trust deeds – no hiding anything
plus its in the balance sheetsSo need a lender that is savvy in SMSF loans via a unit trust pre 2009 – this was set up in 1996
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