SMSF Borrowing through Limited Recourse Borrowing arrangements

• What description for the custodian's capacity should I use
• Do the Cleardocs SMSF Borrowing (bank) documents allow for fixed or variable interest rates?
• Do the Cleardocs SMSF Borrowing (related party) documents allow for fixed or variable interest rates?
• Do the Cleardocs SMSF Borrowing (bank) documents allow for an interest only loan?
• Do the Cleardocs SMSF Borrowing (related party) documents allow for an interest only loan?

What description for the custodian's capacity should I use?

1. In contracts

If the custody trust itself has a name, then insert, for example:

• if individual trustee "John Smith as trustee of the [## insert name of custody trust]"
• if corporate trustee "John Smith Pty Ltd ACN ## as trustee of the [## insert name of custody trust]"

However, there are two further things to bear in mind:

2. In land registry forms

Most land registries will not accept any reference to a custodian or trustee capacity. Therefore, the transfer of land should simply be registered in the custodian's legal name, for example:

• if individual trustee "John Smith"
• if corporate trustee "John Smith Pty Ltd ACN ##"

3. In share registry forms

   Share registries do not accept any reference to a "trust" or "fund". So shares held on trust are generally registered as "John Smith Pty Ltd ACN ## <John Smith Super Account>" or "John Smith Pty Ltd ACN ## <John Smith Custody Account>".

Do the Cleardocs SMSF Borrowing (bank) documents allow for fixed or variable interest rates?

The Cleardocs SMSF borrowing documents — for when the lender is a bank — are suitable for a loan with a fixed interest rate or a variable interest rate. The arrangements about the interest rate will be in the loan documents, which the bank provides.

Do the Cleardocs SMSF Borrowing (related party) documents allow for fixed or variable interest rates?

The Cleardocs SMSF borrowing documents — for when the lender is a related party — are suitable for a loan with a fixed interest rate.

However, if you need a document package for a loan with a variable interest rate, then call us on 1300 307 343. We will arrange for you to contact our lawyers at Maddocks for a free quote for the firm to manually change the Cleardocs documents to allow for a variable interest rate.

If (after Maddocks has given you the quote) you decide to proceed, then here's what to do:

• You order the normal Cleardocs $599 SMSF Borrowing (related party) document package — but when the system asks you "What interest rate is the borrower to pay?", you type in 1100.
• After you order the documents from Cleardocs, you email them to Maddocks and instruct Maddocks to manually change the documents to allow for a variable interest rate. You can discuss this with Maddocks when you order.
• Maddocks will manually change the documents you ordered through Cleardocs to allow for a variable interest rate. Maddocks will then send those documents to you ready for signing.

To arrange the quote from Maddocks, please call us on 1300 307 343.

Do the Cleardocs SMSF Borrowing (bank) documents allow for an interest only loan?

The Cleardocs SMSF borrowing documents — for when the lender is a bank — are suitable for an interest only loan. The arrangements about what is being repaid will be in the loan documents, which the bank provides.

Do the Cleardocs SMSF Borrowing (related party) documents allow for an interest only loan?

The Cleardocs SMSF borrowing documents — for when the lender is a related party — are suitable for a loan in which both the interest and the capital will be repaid. We are discussing with our lawyers at Maddocks whether to modify them to allow you to order a document package that is interest only.

However, if you need a document package for a loan that is interest only, then call us on 1300 307 343. We will arrange for you to contact Maddocks for a free quote for the firm to manually change the Cleardocs documents to allow for an interest only loan.

If (after Maddocks has given you the quote) you decide to proceed, then here's what to do:

• You order the normal Cleardocs $599 SMSF Borrowing (related party) document package — but when the system asks you "What interest rate is the borrower to pay?", you type in 1100.
• After you order the documents from Cleardocs, you email them to Maddocks and instruct Maddocks to manually change the documents to allow for an interest only loan. You can discuss this with Maddocks when you order.
• Maddocks will manually change the documents you ordered through Cleardocs to allow for an interest only loan. Maddocks will then send those documents to you ready for signing.

To arrange the quote from Maddocks, please call us on 1300 307 343.