I'm quite sure I know the answer to this question however, I need to ask to confirm my own findings.

Can I use my SMSF to offset the interest owning on my personal home-loan?

Obviously, I can't pay down the loan - but can I offset the interest payments.

Sounds like it fails the Sole Purpose Test, however I need to ask.


No you cannot do this.

Firstly the home loan is in your personal name whilst your SMSF would be a separate entity. The only way to do this would be for your SMSF to lend money to you and you then place those funds into an offset account.

However, the problem with this is that Trustees of a SMSF cannot lend money to members of the SMSF or their relatives (Section 65 of the SIS Act).

If the property was owned by the SMSF you would then not be able to live in it. This is where the Sole Purpose Test comes in. You generally cannot use the assets of an SMSF for private or personal use under the sole purpose test. Essentially this means that if your SMSF owns a property you cannot use that property as your private residence, even if you pay your SMSF a market rate of rent to live in the property.

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