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Suspension of hardcopy delivery

Due to Melbourne being in lock down, we have suspended all deliveries of hardcopy documents from 5 August 2020. We will continue to supply documents in PDF via email. We intend to resume hard copy printing ASAP once the lock down restrictions ease (ETA mid-September).

Borrowing (alter terms of related party loan)

Click here for online SMSF Core Course unit 10 training – LRBAs
DescriptionSoftcopy *Advice
Where DBA Lawyers drafted the original loan1,200Hourly rates
DBA Lawyers did NOT draft the loan1,600Hourly rates
* Add $75 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.

We note that the ATO has stated that it will generally not consider the income derived from a LRBA to be non-arm’s length income where the LRBA was put on complying terms by 31 January 2017 and the requisite principal and interest repayments are made from 1 July 2015 onwards. Where this deadline has not been met, you may wish to consider approaching the ATO to discuss the SMSF’s position.

For more information, click on the article listed below:

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.