Under the above arrangement there are typically 4 entities involved:

1.   SMSF;

2.   Corporate Trustee to the SMSF;

3.   Bare Trust; and

4.   Corporate Trustee to the Bare Trust.

A SMSF is permitted to borrow to purchase an asset per Section 67A of the Superannuation Industry Supervision Act (SISA 1993). http://mcnamaraandco.com/news/2012/07/critical-points-for-borrowing-inside-your-self-managed-superannuation-fund-smsf/

Per the Australian Taxation Office (ATO), under the above arrangement the SMSF will be treated as the owner of the asset for income tax purposes. Therefore, the SMSF will be assessed on the income earned from the asset and be eligible to claim the applicable deductions.

The SMSF should also account for the GST as appropriate.