Frequently Asked Questions

Are my super fund assets protected under your structure?

Yes absolutely, when using the structure, your loan is not taken out by the SMSF so it is not party to the loan at all. It is still the beneficial owner of the property like any other SMSF loan on the market, we lend to the property trust and not the SMSF.

Do I have to show regular contributions into my fund to get finance with Eclipse?

No – the lenders on our panel do not need to see this history, they assess the loan based on your normal incomes and the proposed rental income from the property being purchased.

I'm Self Employed and have been told by my accountant that I won't qualify, do I have a chance using the Eclipse structure?

Yes – as long as you have enough to cover your deposit, associated costs and sufficient to cover other incidental costs after settlement you could still qualify if your business income is sufficient to demonstrate capacity to repay. Low Doc loans for SMSF purchases are available for the Self Employed with the Eclipse Structure.

Will I really save that much with Eclipse LRBA?

On a loan of $400,000 over 30 years you will potentially save $100,000’s in interest and well and truly cover the cost of the set up in the first 6 months. Not only do you save in interest, but the other fees and charges are significantly lower too.

Why do I have to have individual trustees for my SMSF?

The Eclipse structure is set up to allow the use of standard investment loan products, using a corporate trustee for the SMSF does not allow the lenders to use a non-SMSF loan product. Individual trustees are the beneficiaries of the Bare Trust (in their capacity as trustees of the SMSF) to ensure the best loan products can be utilised.

I only want one number in my SMSF, but you ask for two trustees, why?

The SIS Act requires 2 individual trustees for a SMSF, this can be you and any other person. They do not need to be financially involved, however they will act on your behalf as a trustee should anything happen to you that would cause you not to be able to manage the fund yourself. Similar to the executor of an estate.

How do I set up the Eclipse Structure?

Contact us by email or phone for an application form, you will need your own individual tax file numbers for the application. Our contact details are listed below.

I already have a SMSF, can I change to Eclipse?

Yes you can, please contact us for an amendment application, we will need a copy of your existing SMSF Trust document and details of any corporate entities already created. If you have already purchased a property, a copy of the Contract of Sale is also required.

If I need Financial Planning advice, can you help?

Yes of course, Eclipse is not a Financial Planning company, however we have a relationship with a Financial Planning business called Wealth Foundry which is fully licenced to offer specific SMSF advice.

What are some of the potential risks?

  • Just as gearing can magnify gains, it can also magnify losses

  • Interest rate rises will have a negative impact on the outcome of the strategy

  • Borrowing in super is currently permitted however there is the risk of legislative change

  • Purchasing a structure does not guarantee that an application for borrowing will be successful  

What about Stamp Duty & Capital Gains Tax?

Stamp duty is payable on the purchase price of the asset (refer to the relevant state revenue office for the amount).

When the loan is paid out and the asset is no longer required to be held on trust, ownership is transferred to the SMSF.  As part of the Eclipse LRBA, this transfer to the super fund should be exempt from stamp duty and CGT (as per other compliant LRBA’s).

When selling the asset, a Capital Gains Tax event occurs and CGT may be payable if the fund is in accumulation phase (limited to 10% if held for 12months or more). If the fund is in pension phase there will be no CGT liability.

How much money do I need?

There is no minimum SMSF Account balance prescribed by any of the lending products accessed by Eclipse.

Generally, you will need sufficient funds to cover your 20% deposit, purchase costs and have an amount left over in the fund to cover cash flow fluctuations.  This amount is determined by you as Trustee of the fund with the help of your Financial adviser.

What are the loan terms?

  • Loan term of up to 30 years

  • Interest only of up to 5 years (will vary depending on lender)

  • Principal and interest

  • Loan-to-Value Ratio of up to 80% for commercial loans (some restrictions apply)

  • Loan-to-Value Ratio of up to 80% for residential loans  

Disclaimer

The material contained herein is provided as general information. It does not constitute a recommendation nor does it take into account any persons particular objectives, needs or financial situation. No representation is given, warranty made or responsibility taken as to the accuracy or completeness of any information contained in this publication. Before making a decision in relation to this topic, persons should assess whether it is appropriate to their objectives, needs or financial situation. Persons may wish to make this assessment themselves or seek the help of a professional adviser. Eclipse Super P/L accepts any responsibility or liability for persons acting on the information provided. Persons doing so, do so at their own risk.