05 Dec Repairs and maintenance, what does it all mean?
What constitutes Repairs and Maintenance to an asset?
The trustee of an SMSF can use money borrowed under a Limited Recourse Borrowing Arrangement (LRBA) for carrying out repairs and maintenance on an asset, whether necessary at the time of the acquisition or at a later date. What is a Repair? A repair restores the function of the asset without changing its character and may include restoration to its former appearance, form, state or condition. What is Maintenance? The term ‘maintaining’ ordinarily means work done to prevent defects, damage or deterioration of an asset, or in anticipation of future defects, damage or deterioration, provided that the work merely ensures the continued functioning of the asset in its present state. Read more here.
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