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Single Asset
25/09/2011
The Draft Ruling takes the position that the meaning of “asset” should be given, in certain situations, a practicable meaning rather than a purely legal meaning. Normally, “asset” will be taken as having the sense of “legal title”. However, “asset” will be taken as consisting of 2 or more legal titles where these titles are linked: either legally or physically.Off the plan purchasers
25/09/2011
The Draft Ruling provides that a SMSF Trustee can enter into an off the plan purchase and use borrowed monies to complete the purchase.Apartment & separate car park
25/09/2011
In many cases an apartment and its car space are on separate titles. Consequently in buying the apartment two assets will be acquired. However these assets will be linked if they cannot be separately sold and will also be linked in a practical sense in that they form one dwelling. The Draft Ruling confirms that if the two titles cannot by law be separately sold, then for the purposes of limited recourse borrowing they are treated as a single asset.Development of vacant land
25/09/2011
The Draft Ruling however maintains that the development of a vacant block of land will not constitute a single asset. The development will cause the nature of the property to be fundamentally changed thereby transforming the asset.Sub-divison of land
25/09/2011
The Draft Ruling clearly states that a sub-division of land from one legal title to two or more titles will not be permissible while the land is subject to a limited recourse borrowing.