Spike in LRBAs a result of ATO change to statistics

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Changes to how the ATO reports statistics for SMSF Limited Recourse Borrowing Arrangements has resulted in a dramatic increase in the 2013/14 figures. However this really reflects a underlying trend, instead of a actual spike in LRBAs.

These statistics are contained in the ATO Self-managed super fund statistical report – June 2014, which includes details of the June 2014 quarter, along with new details of the 2012/13 financial year.

Changes to reporting of LRBAs

In the June 2014 statistics the ATO has made changes to the reporting of Limited Recourse Borrowing Arrangements (LRBAs), resulting in the marked jump as seen in the graph below. This means that the statistics going forward will be more reliable, but longer term comparisons are not accurate. The changes resulted in a revision to earlier figures, raising the LRBAs from “$2.6 billion in 2013 to $8.3 billion,” according to the ATO.

SMSF Limited Recourse Borrowing Arrangements LRBAs 2009-2014

In notes explaining the statistics the ATO said:

“The updated estimate of LRBA assets is in part due to the real growth of LRBAs over the 2012-13 financial year but largely due the ATO’s improved approach to collecting LRBA data and changed labels on the SMSF annual return. This new approach means it is difficult to accurately report the growth of LRBAs over the past year. However, it will provide a more accurate point from which to determine growth in the future.

As a result of the new data collection, some amounts previously reported as property assets are now being reported as LRBA assets – representing a decrease of $6 billion for real property assets compared to the $5.6 billion increase in LRBA assets. This is likely to have also contributed to changes to previous estimates for property assets and borrowings.”

This change at least partially contributed to the drop in reported property holdings by SMSFs at the beginning of 2013/14. However there is still growth in SMSF property investment, particularly non-residential property.

ATO SMSF statistics - SMSF property and LRBAs 2009-2014

Number of SMSFs

The ATO says that “there are estimated to be more than 534,000 SMSFs with total assets of $557 billion, an increase of 6 and 12.5 per cent respectively since June 2013.”

ATO SMSF statistics - Total number of SMSFs and members 2009-2014

The trend of declining establishments from the March 2013 statistics appears to be slowly reversing, though wind-ups are also increasing.

ATO SMSF statistics - SMSF Establishments and Wind-ups 2009-2014

Other SMSF statistics

The average assets per SMSF is getting close to one million dollars per fund, with the average assets per member now well over half a million dollars.

ATO SMSF statistics - Average and median assets per SMSF and member 2008/09 - 2012/13

For some time the reporting of ‘collectables and personal use assets’ has shown an odd pattern. There has been a slight recovery from the low point in June 2013, however this may change once more 2014 SMSF annual returns are lodged.

ATO SMSF statistics - SMSF collectables and personal use assets 2009-2014

The statistics also show declining contributions, particularly employer contributions. Likely this is due to changes to the concessional contribution caps for the 2012/13 financial year. This trend may change in the 2013/14 statistics, due to the somewhat higher contribution caps for older members.ATO SMSF statistics - SMSF contribution flows 2008/09 - 2012/13

The next set of ATO SMSF statistics is scheduled to be released in December 2014.

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