THE STRUCTURE AT WORK
Most
Australian's have had little choice but to acquire direct property outside
of their superannuation vehicles and have lacked the ability for their superannuation
portfolio to potentially generate greater returns through a geared SMSF
investment strategy.
As a financially engineered structure, the Equiti Warrant
Trust provides an ability by which a SMSF may include some form of direct
property ownership within its investment portfolio in largely the same way
you would purchase an investment property outside of superannuation.
In fact, the structure has been designed to be simple, straight-forward
and effective.
You select the property, your SMSF receives the net rental income and this goes towards the loan repayments.
Your SMSF will ultimately benefit from any capital growth along with any other benefit that may be associated with a direct investment in residential or commercial property.
Here’s an overview of how the Equiti Warrant Trust structure works:
The Equiti Warrant Trust is usually established with a Corporate Trustee and with your SMSF as the sole beneficiary. This Corporate Trustee may have all members of the superannuation fund as directors and shareholders and thus gives the members complete control over the trust and its assets.
The Equiti Warrant Trust obtains funding to acquire the property from the following three sources:
In light of the proposed borrowing structure that is permitted,
it is important to get the structure absolutely right at first instance
so as to avoid any contravention of the SIS and other legislations.