Borrowing for Self Managed Superfunds – CBA

Borrowing For Self Managed Superfunds in Brisbane

Borrowing for Self Managed Superfunds – CBA

What is self managed super?

Like other super funds, SMSFs invest members' contributions and in turn provide benefits to members at retirement, or death benefits to beneficiaries.

The main difference between SMSFs and other types of superannuation funds is that as an SMSF member you also act as a trustee.

The trustee is the manager of the fund, the legal owner of the assets and has the job of making sure the fund is administered correctly.

This means trustees who are also members have a lot more control, but also increased responsibilities over their fund, especially in the area of investing the fund's assets.

Some other important points to know about your SMSF are:

  • You are allowed up to 4 members
  • Each member is generally required to act as a trustee
  • All trustees are required to be members
  • You can’t have any employees in the fund with you unless they are related
  • You can’t pay yourself for acting as a trustee for your fund

Alternatively you can elect to set up a company to act as trustee in which case all members will generally be required to be a director.

One of the key advantages of SMSFs is that trustees can choose how to invest the fund's assets. All members are trustees and therefore have full control over where their retirement savings are invested. This has both its benefits and considerations.

Benefits and considerations


  • Increased control over investment decisions
  • Greater flexibility
  • Wider investment choices, eg. direct property
  • More estate planning options
  • Ability to tailor your investment strategy to suit your specific needs and circumstances
  • Ability to invest to maximise tax efficiencies and cost savings
  • Ability to pool your resources with your spouse’s superannuation benefits to help reduce costs or acquire high-cost investments
  • Retirement income streams can be tailored to suit your needs
  • Ability to gear your superannuation savings by implementing a limited recourse borrowing arrangement

While there are a host of benefits in starting up an SMSF, there are also a few things you should consider.

Things to consider

  • As a trustee you will be responsible for the fund
  • The rules can be complex and subject to change
  • Your fund will need to comply with significant compliance and ongoing reporting requirements
  • Whether you would lose any important benefits, such as insurance, by rolling over your benefit from a large fund to an SMSF
  • SMSF trustees have fewer avenues of recourse in the event of fraud and theft compared with trustees of the Australian Prudential Regulation Authority (APRA) regulated funds

For more information visit this ATO page or contact a financial planner.

Investment rules and tax

An SMSF enables you to invest in a range of asset classes. However, it’s important to bear in mind that super legislation imposes certain restrictions on SMSF investments.

For example, any investment needs to be treated on a strict commercial basis with the purchase and sale of the asset reflecting the true market value.

Also, trustees cannot generally lend the fund’s money to, or acquire assets from, related parties of the fund. Trustees are also generally prohibited from borrowing money on the fund’s behalf other in certain very specific circumstances.

An SMSF also enables you to optimise your personal circumstances to maximise your tax outcomes.

Because you have control over your fund's investment decisions, you can take tax into account when managing its investments to achieve a desirable taxation outcome.

This can be complicated, and penalties for mismanagement can be severe. Ensure you understand the taxation requirements of an SMSF by investigating the links below.

It’s important you be aware of these issues before deciding whether an SMSF is right for you.

More information can be found at the links below, or by contacting a financial planner.

To find out more about the rules and legislation, visit the ATO website, orseek professional taxation advice.

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