SMSF trustees with LRBAs should be reviewing their repayments and investment strategy as borrowing rates increase from 1 July.

SMSF trustees are allowed to employ short-term borrowings in some specific circumstances to satisfy certain financial commitments of a fund.

The move by major banks away from the LRBA lending space was a business decision unrelated to risk, which has rarely been an issue.

Employing an LRBA in an SMSF should not lead to any of the fund members having a negative asset balance.

The place of outstanding balances of intermediary LRBAs in regards to an SMSF’s total super balance remains unclear as the sector awaits further ATO input.

Transactions arising from limited recourse borrowing arrangements are unlikely to trigger a transfer balance account reporting event.