A new piece of legislation giving effect to proposed measures announced during the 2018 Budget in respect of limited recourse borrowing arrangements (‘LRBA’) is currently being discussed by Parliament.
limited recourse borrowing arrangements
Transitional measures for the $500,000 cap
It seems (based upon a response to a question posed during the course of the campaign) that the Government will introduce transitional measures in relation to this $500,000 cap. The transitional measures will apply in two situations. The first situation is where a super trustee had entered into a contract of sale before 3 May […]
The New Danger for SMSFs with Zero Interest Related Party Loans
A number of recent private binding rulings released by the ATO concern limited recourse borrowing arrangements (LRBA) related party loans and appear to have foreshadowed dire tax implications for such arrangements which may be found to have uncommercial loan terms. Of most concern is the ATO’s warning that income generated from a LRBA may […]
Tax problem for an SMSF-related party: 0% interest rate, 100% LVR, no regular payments etc – ATO issues PBR
The ATO has recently released a Private Binding Ruling (PBR) indicating that a related party loan to a SMSF at a 0% interest rate triggered significant tax problems.
SMSF borrowing – The bare facts on LRBA trusts from Peter Townsend
It is not recommended that the lender act as the bare trustee in a bare trust. The rights over the property as the lender would likely conflict with the obligations as bare trustee and would erode the bare trust status.