News : LRBA

LRBA, NALI/NALE

Revised LCR maintains stance on LRBAs

Self-managed superannuation SMSF Law Companion Ruling LCR 2021/2DC NALE non-arm’s-length expenditure LRBA limited recourse borrowing arrangement DBA Lawyers Fraser Stead

The changes to the operation of the NALE rules have not flowed through to LRBAs, with the ATO’s revised guidance seeing non-arm’s-length dealings as tainting the arrangement forever.

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Auditing, LRBA, NALI/NALE

Non-commercial LRBAs too risky for auditors

Related-party NALI non-arm's length income LRBA Limited recourse borrowing arrangement Auditor

Related-party LRBAs without evidence proving they are on commercial terms are unlikely to receive approval from SMSF auditors due to NALI risk.

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LRBA, Property

LRBA housing market impact overstated

LRBA Limited recourse borrowing arrangement SMSF Association Property

Data has been presented to a parliamentary committee showing the effect LRBA use has had on Australia’s housing market has been exaggerated.

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LRBA, Trusts

Single LRBA can acquire several assets

LRBA 13.22C Property Self-managed superannuation SMSF

An LRBA can be used to acquire multiple properties for a development project, but this approach may raise additional compliance risks.

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LRBA, Property

No LRBA changes for property upgrades

Limited recourse borrowing arrangements LRBA Self-managed superannuation SMSF capital improvements rental properties petition Jim Chalmers

The government will not change the existing rules on using limited recourse borrowing arrangements to allow for energy-efficient improvements on rental properties.

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LRBA

Marginal rise for safe harbour rates

LRBA Related-party loans Interest rates

The safe harbour interest rates for related-party loans under an LRBA have increased slightly for the next financial year, avoiding the sharp rise of 12 months ago.

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Legislation, LRBA, SMSFA, Tax

SMSFA staunchly defends LRBAs

SMSF LRBA Division 296 tax SMSF Association Greens

The ability for SMSFs to use limited recourse borrowing arrangements has been defended amid renewed calls from some politicians to ban them.

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Insurance, LRBA, Property, SMSF

LRBA insurance payments not linear

LRBA Life insurance SMSF Business real property

SMSFs holding life insurance to cover liabilities from an LRBA should be aware any benefits from the policy may not actually be applied to the arrangement.

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Legislation, LRBA, SMSF, Tax

LRBA ban key to Greens Div 296 vote

SMSF LRBA Division 296 Australian Greens

The Greens are calling for restrictions on the use of LRBAs by SMSFs as a condition for the party’s support for the Division 296 bill before parliament.

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LRBA, Property, Trusts

LRBA bare trust transfer needless

Bare trust LRBA SMSF Property

Properties acquired using an LRBA need not automatically be transferred from a bare trust into an SMSF once the loan has been paid back.

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