DESCRIPTION
A non-commercial use of a negotiable instrument (usually a promissory note) involves a transaction between an entity and an SMSF. Such transactions involving an SMSF may include: a) a trustee of an SMSF giving a promissory note to a member to pay a benefit; b) a person giving a promissory note to an SMSF as a contribution; or c) a combination of the above two transactions, often within a very short period of time. The same effect may be attempted through non-commercial use of cheques, such as post-dating a cheque or only presenting a cheque for payment after a significant period of time has passed. 2. Such non-commercial use of a promissory note includes where the note is: a) never intended to be honoured; b) immediately re-endorsed back to the issuer; c) post-dated; or d) while on its face immediately payable, it is only intended to be honoured after a significant period of time has passed (e.g. longer than would occur in a normal commercial context for arm's length parties).