From www.smsfadviser.com: The ATO Commissioner has updated guidance on limited recourse borrowing arrangements which highlights the need for careful review of non-ADI offset accounts to ensure compliance with superannuation law.

Genuine offset accounts from authorised deposit-taking institutions present low risk, whereas those from non-ADIs require thorough due diligence due to potential regulatory issues.

The updated guidance clarifies that while offset accounts with ADIs are permissible, any borrowing or charge associated with non-ADI lenders must comply with legal requirements to avoid contraventions and associated penalties.