ATO Guidelines on Related Party Loans to SMSFs

 

 

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The ATO has released a practice statement on what they consider to be arm’s length arrangements where a superannuation fund has borrowed money from a related party under a Limited Recourse Borrowing Arrangement (LRBA).

The ATO has taken a very conservative approach, with several of the factors contrary to industry advisement. They have indicated that if superannuation funds with these sorts of arrangements can ensure that the above guidelines are satisfied by 30 June 2016, as well as payments of principal and interest for the year ended 30 June 2016 being made under terms consistent with an arm’s length dealing, no further compliance action would be undertaken.

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