Hello Clare
It is certainly possible for there two be two loans, both being LRBAs, in relation to the same single acquirable asset.
It is necessary that both loans (in this instance the fixed loan and the variable loan, both from Heritage Bank) were each used to acquire the same property.
Hopefully the loan documentation reflects that each loan from Heritage Bank was made to enable the fund to settle on the property, and that all the other elements of a compliant LRBA are satisfied. Given the lender for both loans is the same arm’s length lender, I don’t see there being any non-arm’s length income issues.
Whilst this situation is certainly unusual that does not mean that it is non-compliant.
Happy to hear the thoughts of other auditors on this matter.
Best regards
The Auditors Institute