SMSF Borrowing: Cleardocs documents updated to reflect changes in the law

The law on SMSF borrowing changed on 7 July 2010. Cleardocs updated its documents from Friday 9 July 2010.

The changes are required by the Superannuation Industry (Supervision) Amendment Act 2010 which passed through the Senate without amendment on 24 June 2010.

You can read how the new rules will affect your super fund in an earlier ClearLaw article here.

Cleardocs documents are up to date

We have updated our SMSF documents to reflect the changes to the law about SMSF Borrowing that took effect on 7 July 2010. We have changed:

• our SMSF deed document package; and
• our SMSF Borrowing document packages — for when the lender is a bank, and for when the lender is a related party.

As always, the changes have been signed-off by our lawyers at Maddocks.

What are the changes to the law?

The highlights of the changes to the law are:

• The name for SMSF borrowing arrangements has changed from “Instalment Warrant Borrowing arrangements” to “Limited Recourse Borrowing arrangements”.
• The SMSF can use the borrowed money to meet expenses incurred in connection with the borrowing — for example: conveyancing fees, stamp duty, brokerage or loan establishment costs. Previously, it was uncertain whether the money could be used for those expenses.
• The concept of 'single acquirable asset' has been clarified, and narrowed, in relation to shares etc.
• The SMSF can refinance its borrowing.

Our lawyers at Maddocks summarised the changes in an article we published in our ClearLaw newsletter. You can read the full article here. The changes are in the Superannuation Industry (Supervision) Amendment Act 2010.

What version of the Cleardocs deed is required to use the new documents?

For an SMSF to use the new SMSF Borrowing documents, the SMSF needs to have the latest version of the Cleardocs SMSF deed — that is, the fund must have been created, or had its deed updated, on or after Friday 9 July 2010.

You can use the Cleardocs SMSF deed update package to update an SMSF’s deed to a Cleardocs deed if the SMSF:

• does not have a Cleardocs deed; or
• does not have the latest version of the Cleardocs deed.

The Update to SMSF package costs $99 and is available online here.

What needs to be done for existing orders?

Here’s how to handle existing orders:

• Borrowing not yet started? - we will replace documents

  If the SMSF borrowing for which you have received SMSF Borrowing documents from Cleardocs has not yet started, then call us on 1300 307 343 and we will arrange for you to get the updated documents by email for free.

• Borrowing has started? - the documents are fine

  If the documents are in place and the SMSF borrowing has started, then the documents are fine as they are.

• Pending orders at Cleardocs?

  If you have not yet paid for a document package you have started to order from Cleardocs, then you will automatically get the updated version when you complete your order and pay.

• Printing and Binding?
  

  You will not have to pay the Cleardocs fee for the updated documents. However, if you ordered printing and binding and:

  • you have “confirmed” the printing and binding for the pre-change version of the documents; and
  • you want us to arrange printing and binding again for the documents after the change, then you will need to pay the $49.50 printing and binding fee again.

  You can order the printing and binding again, by clicking the green button “More”, then the light blue button “Order Extra Printing”.

More information?

If you have any questions about the changes to the Cleardocs documents, or any other Cleardocs products or services, please call us on 1300 307 343.

Order SMSF related document packages

• for when the lender is a bank
• for when the lender is a related party

Download checklist

Download a checklist of the information you need to order a document package.