The Commissioner has issued another Interpretative decision today concerning whether a borrowing by an SMSF trustee can satisfy the requirements of s67(4A) of the SIS act where a related party of the SMSF has given the lender a personal guarantee as part of the arrangement. Quite often this has been a requirement of lenders in limited recourse borrowing arrangements. In the matter under discussion a member of a SMSF had given a personal guarantee to support the limited recourse borrowing by the SMSF. This occured before 7 July 2010.,before the legislation was changed. Basically the Commissioner confirmed that the giving of the guarantee will not result in a contravention of the SIS act provided the arrangement has the other elements of an approved instalment warrant arrangement under the legislation as it was. In relation to new instalment warrant arrangements post dating 7 July 2010 the the rights of the guarantor must be limited (on subrogation) to the rights against the asset being acquired by the Fund. Interesting!!!