The ATO has issued its Practical Compliance Guidelines as to what constitutes a “safe harbour” for related party LRBAs. The Guidelines provided guidance only in relation to real property LRBAs and listed shares/securities LRBAs.
LRBA
Update on 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 be […]
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.