When a SMSF undertakes borrowings to acquire an investment the lenders recourse against the SMSF is limited to:

Question

Quizplus · Accepted Answer

When an SMSF undertakes borrowings to acquire an investment, the lender's recourse is limited to the asset subject to the borrowing. This means that if the SMSF defaults on the loan, the lender can only seek to recover the asset that was purchased with the borrowed funds. The lender cannot seek recourse against any other assets held by the SMSF, including real property or other investments. Therefore, option A is the correct choice. Option B is incorrect as the lender's recourse is not limited to real property held by the SMSF. Option C is also incorrect as both options A and B are not correct. Option D is irrelevant as there is no mention of a 50% limit on the lender's recourse.

When a SMSF Undertakes Borrowings to Acquire an Investment the Lenders