{"id":"F2020L00589","name":"Superannuation Industry (Supervision) In-house Asset Determination — Intermediary Limited Recourse Borrowing Arrangement Determination 2020","slug":"superannuation-industry-supervision-in-house-asset-determination-intermediary-limited-recourse-borro","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":100131,"registerId":"commonwealth-F2020L00589-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1. Name of instrument","sectionType":"part","heading":"1. Name of instrument","content":"## 1. Name of instrument\n\nThis determination is the Superannuation Industry (Supervision) In-house Asset Determination — Intermediary Limited Recourse Borrowing Arrangement Determination 2020.","sortOrder":0},{"sectionNumber":"2. Commencement","sectionType":"part","heading":"2. Commencement","content":"## 2. Commencement\n\nThis instrument commences on 24 September 2007.","sortOrder":1},{"sectionNumber":"3. Application","sectionType":"part","heading":"3. Application","content":"## 3. Application\n\nThis instrument applies to the trustee(s) of a self managed superannuation fund (fund) who has entered into the Intermediary Limited Recourse Borrowing Arrangement (Intermediary LRBA) (as defined in 5(b) below).","sortOrder":2},{"sectionNumber":"4. Determination","sectionType":"part","heading":"4. Determination","content":"## 4. Determination\n\nFor the purposes of paragraph 71(1)(f) of the Superannuation Industry (Supervision) Act 1993, if at a time:\n\n(a) an asset (the investment asset) of a fund is an investment in a related trust of the fund; and\n\n(b) the related trust is one described in paragraph 67A(1)(b) in connection with the Intermediary LRBA under which the trustee of the fund is maintaining a borrowing that is covered by subsection 67A(1); and\n\n(c) the only property of the related trust is the acquirable asset mentioned in paragraph 67A(1)(b);\n\nthe investment asset is not an in-house asset of the fund at the time unless the acquirable asset mentioned in paragraph 67A(1)(b) would be an in-house asset of the fund if it were an asset of the fund at the time.","sortOrder":3},{"sectionNumber":"5. Definitions","sectionType":"part","heading":"5. Definitions","content":"## 5. Definitions\n\n(a) Expressions used in this determination have the same meaning as in the Superannuation Industry (Supervision) Act 1993 unless otherwise stated.\n\n(b) The Intermediary LRBA is an arrangement entered into by the parties which meets the following requirements:\n\n(1) a holding trust is established with members of a fund being the only trustees or shareholders and directors of the corporate trustee (Holding Trustee);\n\n(2) the trustee of the fund is a beneficiary of the holding trust;\n\n(3) the Holding Trustee holds an acquirable asset (Asset) on trust for the trustee of the fund, who is beneficially entitled to the Asset;\n\n(4) the Asset is a single acquirable asset (as referred to in subsection 67A(1)) that the trustee of the fund is allowed to acquire under the Superannuation Industry (Supervision) Act 1993;\n\n(5) the Holding Trustee enters into a borrowing as principal with a lender with the borrowing secured by a mortgage over the Asset;\n\n(6) the contract or deed of borrowing, referred to in paragraph (5), between the Holding Trustee and the lender may not limit the lenders right of recourse, under the contract or deed, to only the Asset in the event of default;\n\n(7) the lender may require that personal guarantees are given as part of the Intermediary LRBA;\n\n(8) the arrangement is established by a legally binding deed(s) under which the trustee of the fund and the Holding trustee agree, for:\n\n(i) the trustee of the fund to maintain all borrowing obligations entered into by the Holding Trustee in respect of the borrowing referred to in paragraph (5);\n\n(ii) the trustee of the fund is absolutely entitled to any income derived from the Asset, less fees, costs, charges and expenses incidental to the acquisition, holding or management of the Asset;\n\n(iii) the trustee of the fund has the right to acquire the legal title of the Asset on completion of the borrowing referred to in paragraph (5);\n\n(iv) the rights of the Holding Trustee or any Guarantors against the trustee of the fund in connection with default on the borrowing referred to in paragraph (5) is limited to the Asset.\n\n(9) the documentation referred to in paragraph (8) in connection to the borrowing referred to in paragraph (5), is disclosed to the lender at the time of the borrowing.","sortOrder":4}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"kimi_summary":{"content_quality":"ok","complexity_score":6,"scope_assessment":{"changed":false,"description":"This determination appears tightly scoped to its original purpose. It addresses a specific technical issue regarding the in-house asset treatment of Intermediary LRBAs, which are a particular variant of limited recourse borrowing arrangements. The instrument does not appear to have expanded beyond its original intent of providing a targeted exemption for this specific structure while maintaining integrity through the 'unless' clause that preserves in-house asset treatment for problematic underlying assets."},"complexity_factors":["Heavy reliance on external statutory cross-references (SIS Act 1993, specifically sections 67A, 71, and defined terms like 'related trust', 'acquirable asset', 'in-house asset')","Nested conditional logic: the exemption applies only if multiple conditions are met (paragraphs 4(a), (b), (c)), with a critical 'unless' exception at the end","Detailed definitional requirements in section 5(b) with 9 specific sub-paragraphs that must all be satisfied for the arrangement to qualify","Technical terminology throughout ('limited recourse borrowing arrangement', 'holding trust', 'acquirable asset', 'related trust') that assumes familiarity with superannuation and trust law","Retroactive commencement date (24 September 2007) creates temporal complexity regarding which arrangements are covered","The 'Intermediary LRBA' definition itself incorporates by reference the statutory concept of 'single acquirable asset' from subsection 67A(1), creating a layered definitional structure"],"plain_english_summary":"This determination lets SMSFs using a specific Intermediary Limited Recourse Borrowing Arrangement treat their investment in the related holding trust as not being an “in‑house asset,” provided strict requirements are met (fund is beneficiary, holding trustee borrows for a single asset, fund services loan, lender’s recourse limited to the asset, etc.). It affects SMSF trustees and borrowers by allowing common borrowing structures without breaching in‑house limits, while still catching cases where the underlying asset would itself be an in‑house asset."},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":false,"description":"The instrument defines its own limited scope: it applies to trustees of self-managed funds that have entered the Intermediary LRBA as described in the text and sets the in‑house asset treatment for those specific arrangements. The text does not indicate an expansion or contraction beyond that described Intermediary LRBA framework."},"complexity_factors":["Dependence on external SIS Act provisions — the determination operates only 'for the purposes of paragraph 71(1)(f)' and refers to subsection 67A(1) (see Determination, para 4).","Detailed structural requirements for an Intermediary LRBA that must all be met (holding trust composition; beneficiary status; single acquirable asset; trustee rights) (Definitions, 5(b)(1)–(4), (8)).","Interplay between legal form and economic substance — beneficial entitlement, income rights and right to acquire legal title are specified (5(b)(3), (8)(ii)–(iii)).","Borrowing and security mechanics with potential full recourse and guarantor requirements affect lender risk and trustee obligations (5(b)(5)–(7), (8)(i), (8)(iv)).","Contractual documentation and disclosure obligations to lenders create compliance and evidentiary burdens (5(b)(9); 5(b)(8)).","Narrow factual inquiry required at each time point to decide classification — whether the related trust’s only property is the acquirable asset, and whether that asset would itself be an in‑house asset if held directly (Determination, para 4(a)–(c))."],"plain_english_summary":"This determination tells trustees of self-managed superannuation funds how an investment held through a related holding trust under an \"Intermediary LRBA\" is treated for the SIS Act's in-house asset rules. It says such an investment is not an in-house asset unless the underlying acquirable asset would itself be an in-house asset if held directly. It affects trustees, holding trusts and lenders because it changes asset classification and so influences compliance obligations and borrowing arrangements."}},"importantCases":[],"_links":{"self":"/api/acts/superannuation-industry-supervision-in-house-asset-determination-intermediary-limited-recourse-borro","history":"/api/acts/superannuation-industry-supervision-in-house-asset-determination-intermediary-limited-recourse-borro/history","analysis":"/api/acts/superannuation-industry-supervision-in-house-asset-determination-intermediary-limited-recourse-borro/analysis","conflicts":"/api/acts/superannuation-industry-supervision-in-house-asset-determination-intermediary-limited-recourse-borro/conflicts","importantCases":"/api/acts/superannuation-industry-supervision-in-house-asset-determination-intermediary-limited-recourse-borro/important-cases","documents":"/api/acts/superannuation-industry-supervision-in-house-asset-determination-intermediary-limited-recourse-borro/documents"}}