Limited Recourse Borrowing Arrangement (LRBA)

Government made right call in not banning SMSF borrowing: SMSF Association

The SMSF Association says the Government made the right call in not banning SMSF borrowing, and remains supportive of LRBAs. The ALP has announced a policy of returning to a ban on SMSFs borrowing through Limited Recourse Borrowing Arrangements (LRBAs), as part of its housing affordability package. SMSF Association CEO Andrea… Read More »Government made right call in not banning SMSF borrowing: SMSF Association

ATO warns about 31 January deadline for arm’s length LRBAs

The ATO has reminded SMSF trustees and professionals about the 31 January 2017 deadline to ensure Limited Recourse Borrowing Arrangements (LRBAs) are on an arm’s length basis. #SMSF trustees: Have you reviewed non-arm’s length LRBAs? Don’t forget the deadline is 31 January. Learn more at https://t.co/CaQf7YilBR pic.twitter.com/zXu0FU6wwI — ato.gov.au (@ato_gov_au)… Read More »ATO warns about 31 January deadline for arm’s length LRBAs

ATO issues new ruling on LRBA non-arm’s length income: TD 2016/16

The ATO has issued a new Taxation Determination, TD 2016/16, setting out when a non-arm’s length Limited Recourse Borrowing Arrangement could result in Non-Arm’s Length Income. The ATO has also withdrawn two earlier Interpretative Decisions, ATO ID 2015/27 and ID 2015/28, which dealt with Non-Arm’s Length Income (NALI), as “issue is… Read More »ATO issues new ruling on LRBA non-arm’s length income: TD 2016/16

Safe harbour provision for low interest rate SMSF LRBAs

safe harbour, Non-Arm's Length Income (NALI), low interest, zero interest, SMSF borrowing, LRBAsIn order to remove uncertainty surrounding low, or zero, interest rate LRBAs and the non-arm’s length income rules the Government should create a safe harbour provision.

It is unclear where the idea for 0% interest rate LRBA started, through the June 2012 meeting of the superannuation technical National Tax Liason Group was likely a key point. In this meeting the ATO was asked if zero interest rate LRBAs would breach the borrowing rules. The answer was no, but the minutes do not record if the discussion included consideration of the Non-Arm’s Length Income (NALI) rules.

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