News : LRBA

LRBA

Unreviewed LRBA can drag on whole fund

LRBA

SMSFs looking to service an LRBA with high interest rates may find the fund’s total income being used to service a loan that is expensive compared to other offerings.

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Cryptocurrency, LRBA

Borrowing for crypto not viable in SMSF

SMSF LRBA cryptocurrency

The use of LRBAs to invest in cryptocurrency inside an SMSF is practically impossible given the current lending market and superannuation laws.

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LRBA, SMSF, Superannuation, Tax

LRBA TSB treatment a soft cap issue

$3 million soft cap LRBA apportioning

The apportioning of LRBA liabilities remaining to be paid to the total super balance of SMSF members is another $3 million soft cap issue.

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Compliance, In-house assets, LRBA

Loan key to holding trust asset

LRBA gearing strategy

An LRBA of any magnitude should be used for compliance purposes if an associated holding trust has acquired the asset in question.

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LRBA, SMSF, Tax

LRBA deductions limited to borrowing

LRBA deductions

An SMSF with an LRBA in place can claim deductions only for costs associated with borrowing activities and not for any expenses related to the loan’s establishment.

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LRBA

LRBA refinancing now a real option

SMSF LRBA refinancing

SMSFs using a related-party LRBA may look to refinance the loan arrangement on more favourable terms, but must do so with caution.

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Compliance, LRBA, NALI/NALE, SMSF

Dual LRBAs feasible but complex

Related-party commercial LRBA NALI ATO SIS

SMSFs can use commercial and related-party LRBAs to purchase an asset, but may struggle to get past lending criteria and the NALI safe-harbour provisions.

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LRBA, SMSF

Rate impact not yet seen in LRBA market

LRBA interest rates

SMSFs with related-party LRBAs have yet to respond to the rise in the safe-harbour interest rate as their peers search for better terms following successive moves by the Reserve Bank of Australia.

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In-house assets, LRBA, Trusts

Trusts not an ownership workaround

trusts SMSF assets

Trustees must ensure they are registering assets purchased on behalf of SMSFs in the fund’s name and refrain from using trusts as a measure to compensate for poor documentation.

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LRBA, Property, SMSF

LRBA interest rate pain coming

LRBA interest rate

SMSF trustees using a related-party LRBA and adhering to the PCG 2016/5 safe harbour rules will be facing a significant interest rate hike in 2023/24.

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