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What Happens at the End of the Borrowing Arrangement?

A limited recourse borrowing arrangement may be ended either by:

  • the self managed superannuation fund paying off the loan and then collapsing the custodian trust by having the legal title to the asset transferred into its name; or
  • the custodian selling the asset and then using the sale proceeds to pay out the loan - this would occur where the self managed superannuation fund is in default of its loan obligations.

Different tax consequences arise depending on how a limited recourse borrowing arrangement is ended. Please contact us at  should you require assistance.

 

Please be advised this is general information only, and is not to be taken as legal advice. If you would like more information, or have a legal query, please contact LY Legal through the Surge App.

Last Reviewed: 08/08/2025

Last Updated: 08/08/2025