By Moore Stephens Australia
Editor: The Tax Office has issued an information sheet on their website warning trustees about the perils of lending an SMSF's funds to the wrong person.
This includes the practice adopted by some taxpayers of withdrawing funds from an SMSF to temporarily help prop up their business when cash flow is tight.
This practice has apparently become quite prevalent since the global financial crisis.
Is your loan (or withdrawal of funds) in your SMSF's best interest?
The Tax Office asks – has your SMSF loaned money? If so, make sure the loan terms comply with the law and are in the best interests of your retirement.
When a loan agreement is not in the best interest of your SMSF – for example, when you have given discount loan rates or favourable terms – this could have serious consequences.
In addition to putting your member's benefits at risk, your SMSF could be found to be non-complying and would, therefore, not qualify for concessional tax rates.
This publication is issued by Moore Stephens Australia Pty Limited ACN 062 181 846 (Moore Stephens Australia) exclusively for the general information of clients and staff of Moore Stephens Australia and the clients and staff of all affiliated independent accounting firms (and their related service entities) licensed to operate under the name Moore Stephens within Australia (Australian Member). The material contained in this publication is in the nature of general comment and information only and is not advice. The material should not be relied upon. Moore Stephens Australia, any Australian Member, any related entity of those persons, or any of their officers employees or representatives, will not be liable for any loss or damage arising out of or in connection with the material contained in this publication. Copyright © 2011 Moore Stephens Australia Pty Limited. All rights reserved.
