When SMSFs borrow to buy property under a Limited Recourse Borrowing Arrangement (LRBA), its always confusing which name is on the expenses and agreements.
Its important to know that the property under a LRBA is registered or titled in the “Bare Trustee” not the SMSF and not your personal name. So if the property is registered in the name of the bare trustee should the expenses in the bare trustee name also?
You will note that as the property is in the name of the bare trustee, insurance, rates & water notices will follow the name on the title (bare trustee).
However, costs of the fund or expenses are provided in the SMSF Trustee ATF SMSF name as it is the SMSF as beneficial owner, who is responsible for expenses of the fund, therefore the agent statement for rent will be in the name of the SMSF as will any expenses of the fund such as repairs and maintenance. Note, you will see the loan will be in the following sequence “SMSF Trustee ATF SMSF”.
