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Borrowing (alter terms of related party loan)

DescriptionSoftcopy *Advice
Where DBA Lawyers drafted the original loan1,200Hourly rates
DBA Lawyers did NOT draft the loan1,600Hourly rates
* Add $100 for hard copy per arrangement
Pricing includes GST

Why change the terms of a related party loan?

Where a SMSF trustee has borrowed from a non-bank lender in connection with an LRBA, the ATO has confirmed its view that any income (including any net capital gains) derived in connection with the LRBA will be non-arm’s length income and accordingly, taxed at the highest marginal tax rate (plus any applicable levies), unless the loan is on arm’s length terms.

To assist SMSF trustees, the ATO has released PCG 2016/5, which sets out ‘safe harbour guidelines’ that effectively provide a standardised set of loan terms that in the ATO’s view equates to arm’s length terms for real property and listed shares and listed units.

Those who are concerned might consider changing the terms of the related party loan to replicate the safe harbour guidelines or to ensure that the parties are in the same position they would have been in had they dealt at arm’s length.

What is provided in the ‘documents only’?

See the order form for more details in this regard.

Please note that mortgage, charge or security documents are not included in the package and will need to be ordered separately through your preferred provider.