SMSF Borrowing guide

Thank you for considering using Cleardocs to arrange your SMSF borrowing documents.

By using Cleardocs to arrange your SMSF borrowing documents, you get the benefit of:

  • ensuring your SMSF deed is compliant with current superannuation law;
  • a complete supplement package to the lender's transaction documents;
  • documents that are tailored to meet the requirements of your particular bank or lender; and
  • documents that are signed off by our lawyers at Maddocks. Our relationship with Maddocks allows you to utilise the free legal helpline we arrange through Maddocks and to use extra services of Maddocks to adjust your borrowing documents to suit particular circumstances.

Overview of SMSF borrowing You can view an interactive graphic overview about how SMSF borrowing works here.

Step by step guide to SMSF borrowing You can use the information below to work out how to arrange the documents for SMSF borrowing through Cleardocs.

The table below explains the full requirements — in summary, here's what you need:

  • Step 1: an SMSF;
  • Step 2: the SMSF needs a deed with suitable borrowing provisions;
  • Step 3: sometimes, the SMSF needs a company as its trustee — check with the lender;
  • Step 4: usually, the Declaration of Custody Trust (also known as a Bare trust) for the SMSF borrowing needs a company as its trustee — check with the lender. That company must be a different company from the one that is the SMSF trustee — so you may need two companies; and
  • Step 5: an SMSF borrowing document package which includes the Declaration of Custody Trust.

 

Step

What do you need?

Where is there more information?

Solution: How to complete this step

How much will it cost?

Step 1

A Self-Managed Superannuation Fund (or SMSF)

An SMSF

You can read about setting up an SMSF through Cleardocs here.

You can order an SMSF here.

SMSF set up

  • 143.00 (inc. GST)
  • Optional printing, binding and courier delivery an extra $49.50 (inc. GST)

Step 2

An up-to-date Cleardocs SMSF deed

The SMSF should have a Cleardocs deed to ensure that it works with the Cleardocs SMSF borrowing package.

  1. The Cleardocs deed must be from on or after 7 July 2010 (that is, version 11 or later) – that date matters as the law about SMSF borrowing changed that day and the Cleardocs deed was updated to reflect that change.
  2. If the SMSF does not have a Cleardocs deed, you must seek legal advice to ensure that the deed permits the trustee to enter into the limited recourse borrowing arrangement and satisfies the lender's requirements.
  1. You can check whether the SMSF has a Cleardocs deed by asking the person who arranged the deed for you.
  2. If the SMSF has a Cleardocs deed, then you can check which version it has by:
  • logging in at Cleardocs;
  • clicking the blue button "MySMSFs" in the second row of buttons at the top of the home page;
  • finding the relevant SMSF in the list; and
  • viewing the light blue "Version X of Y" button in the second column headed "Version".

You can read about updating the deed to a Cleardocs deed here.

You can arrange for the SMSF to up-date to the latest version of the Cleardocs deed here. You can do that:

  • even if the SMSF does not have a Cleardocs deed; and
  • if the SMSF has an old Cleardocs deed.

SMSF deed update

  • $110.00 (inc. GST)
  • Optional printing, binding and courier delivery an extra $49.50 (inc. GST)

Step 3

The trustee of the SMSF

Some lenders require the SMSF to have a company as its trustee.

This is a requirement of the banks. Other lenders may not require it. You should check with the lender.

If the SMSF has individuals as its trustee, then:

  • if you need a new company to be the trustee, you can read about using Cleardocs to register a company here; and
  • you can read about using the Cleardocs SMSF Change of Trustee document package to replace the SMSF's individual trustees with a company trustee here. To use that document package, the SMSF must have a Cleardocs deed — any version is acceptable. You can read about changing the SMSF's deed to a Cleardocs deed here.

You can order the document package:

  • to update the SMSF's deed to a Cleardocs deed here;
  • to register a new company to be the trustee here; and
  • to change the SMSF's trustee to a company here.

SMSF deed update

  • $110.00 (inc. GST)
  • Optional printing, binding and courier delivery an extra $49.50 (inc. GST)

Company registration

  • $606.50 (including ASIC registration fee of $469.00 and GST)
  • Optional printing, binding and courier delivery an extra $49.50 (inc. GST)

Change of SMSF Trustee

  • $143.00 (inc. GST)
  • Optional printing, binding and courier delivery an extra $49.50 (inc. GST)

Step 4

The trustee of the Declaration of Custody Trust

Often, the lender requires the trustee of the Declaration of Custody Trust (also known as a "Bare Trust") to be a company – you should check with the lender.

Importantly, if you do need a corporate trustee for the Declaration of Custody Trust, then that company must be a different company from the one that is the SMSF trustee.

If you need a new company, you can read about using Cleardocs to register a company here.

You can order the document package to register a new company to be the trustee of the Declaration of Custody Trust here.

Company registration

  • $606.50 (including ASIC registration fee of $469.00 and GST)
  • Optional printing, binding and courier delivery an extra $49.50 (inc. GST)

Step 5

The SMSF borrowing document package — including the Declaration of Custody Trust (or Bare Trust)

You need to arrange a Declaration of Custody Trust (or Bare Trust) and some related documents.

Cleardocs has two separate SMSF borrowing packages:

  • one for borrowing from a bank; and
  • one for borrowing from a related party.

These documents set out the borrowing arrangement between:

  • the lender;
  • the SMSF trustee(s); and
  • the Custodian — that is, the trustee of the Declaration of Custody Trust.

You can read about the document package:

  • for borrowing from a bank here; and
  • for borrowing from a related party here.

You can order the document package:

  • for borrowing from a bank here; and
  • for borrowing from a related party here.

SMSF borrowing from a bank

  • $209.00 (inc. GST)
  • Optional printing, binding and courier delivery an extra $49.50 (inc. GST)

SMSF borrowing from a related party

  • $599.50 (inc. GST)
  • Optional printing, binding and courier delivery an extra $49.50 (inc. GST)

Any questions?

If you have any questions:

  • about how to use Cleardocs, contact the Cleardocs helpdesk on 1300 307 343.
  • about legal issues, contact the Cleardocs helpdesk on 1300 307 343. If you need advice, we will arrange for you to speak to a lawyer at Maddocks. The firm provides a free legal helpline in relation to the documents Cleardocs provides. If you require other legal advice in relation to your particular circumstances, then this will be charged for.

Thank you for using Cleardocs.