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Annt(Enthusiast)Enthusiast
12 Jan 2023

SMSF is going to buy a commercial property/office from members by entering to LRBA. The SMSF set up bare trust with a corporate trustee. Everything will be documented at market and arm length basis (for sale contract, loan agreement, lease agreement etc).

  1. When enter into sale agreement, what name of purchaser should be? This is happen in Vic state.
  2. Can the seller (members) also be the lender at arm length basis in this transaction ie interest charges and repayment basis will be similar/same if borrow from financial institutions?
  3. Are there any prohibitions or contraventions against the super law?

Thank you very much

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1,403 views
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Kris_SMSF(Dynamo)Registered Tax Professional
16 Jan 2023

Regarding the name on the contract, the following format is applicable for VIC:

  • Corporate Trustee for Bare Trust Pty Ltd [ACN XXX XXX XXX]

Other states have different formats for the name on the contract (and transfer documents), so always seek advice from your solicitor.


There is a transfer duty exemption in Victoria.


With borrowing from a related party, there are two options to determine arms-length:


  1. Complete an application and receive a loan offer from a financial institution to determine market rates and conditions from an arms-length lender (impractical because neither you as the borrower or the lender will want to go through the process and NOT provide the loan); or
  2. Follow the conditions as laid out in the PCG (safe harbour) as shared by @Bruce4Tax, noting the interest rates change year to year and can be found here: SMSF LRBA interest rates



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