ARTICLE
5 February 2016

ATO update for superannuation limited recourse borrowing arrangements

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Carroll & O'Dea

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Non arms length income provisions may apply when a SMSF Trustee undertakes a limited recourse borrowing arrangements.
Australia Finance and Banking

The ATO has issued two new interpreted decisions (ATO ID 2015/27 and ATO ID 2015/28) which suggests that the non arms length income (NALI) provisions can apply when a SMSF Trustee undertakes a limited recourse borrowing arrangements. NALI is currently taxed at 47%.

The ATO has indicated that they will not be selecting SMSF's for review in the 2014/2015 year or earlier years purely on this basis, but that SMSF trustees should take action to ensure that their existing limited recourse borrowing arrangements fully comply by 30 June 2016.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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