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The LRBA Loan has been repaid and the property is to be transferred from the bare trust to the Fund. Significant improvements are intended which had to be postponed while the borrowing was in place. Are there any continuing restrictions which prevent these improvements now being made from the Funds own resources?
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Hi Brian
If the LRBA loan has been repaid & the property transferred from the bare trust to the Fund the LRBA rules will no longer apply to that asset from the date of transfer.
That is the Fund can now use its own resources to make significant improvements to the property.
The LRBA rules in relation to improvements (whilst there is a borrowing / bare trust) can be complicated as accumulated funds can be used for improvements as long as the asset does not become a different asset.
A good reference is SMSF 2012/1 - SMSF's: LRBA's - application of key concepts.
Thanks
SMSF AAA