Hot Issues
spacer
Our Advent calendar for 2019
spacer
The economic and investment outlook for 2020
spacer
You'll be the life of the party when armed with this information!
spacer
Review queries retirement system understanding
spacer
Retirement planning in 15 minutes a day
spacer
Eggs, baskets and diversified SMSF investment strategies
spacer
New opportunities for employees to claim additional superannuation
spacer
ATO provides further trustee instructions on myGovID
spacer
The main benefits of professional financial help.
spacer
Downsizer contributions offer more than meets the eye
spacer
6 new financial videos
spacer
GDP by country since 1800
spacer
All Australia's vital statistics - October 2019
spacer
Does your mind help or hinder your investment success?
spacer
Four key principles that help achieve portfolio success
spacer
Traversing a synchronised economic slowdown
spacer
A positive pension change with a cash rate twist
spacer
Shares to remain volatile as trade war heats up
spacer
NALI, LRBA measures pass Parliament
spacer
Interest rising in SMSF set-up
spacer
Choosing your investment strategy
spacer
ATO letters indicate a wider SMSF warning
spacer
Australia by the numbers - September 2019
spacer
ATO opens applications for SG exemption
spacer
SMSFs attract younger members
spacer
Heed restrictions on downsizer contributions
spacer
Access to more resources and tools than most websites.
spacer
Valuations key to avoiding NALI restrictions
spacer
SMSF advice appetite strong, says ASIC
spacer
For a smoother path to investment success, diversify
‘Retrospective’ LRBA measures tipped to cause headaches

With the government reintroducing its total super balance measure for SMSF loans, technical experts have warned that the retrospective nature of the change could pose issues for SMSF clients purchasing property this year.

       

 

Last week, the government introduced Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2019 into parliament. The bill includes a previously lapsed measure that will see the outstanding balance of an LRBA added to a member’s total super balance for certain SMSFs.  

SuperConcepts general manager of technical services and education Peter Burgess said the bill, which applies to all LRBAs entered into from 1 July 2018 onwards, was expected to pass imminently given other politically sensitive measures in the legislation had been dropped.

“The SG [super guarantee] amnesty measure has now been removed and the remaining measures are largely integrity measures, [so] this bill is no longer controversial from a political perspective, and therefore, we expect it will receive an easy ride through parliament,” Mr Burgess told SMSF Adviser.

Australian Executor Trustees senior technical services manager Julie Steed said the retrospective nature of the bill poses an issue for SMSF professionals looking at property strategies in the current financial year.

“The 1 July 2018 proposed start date for the LRBA measure may mean clients looking to undertake transactions in 2019–20 need to factor the varied total super balance calculation into their actions,” Ms Steed said.

However, Heffron SMSF Solutions head of SMSF technical and education services Lyn Formica added that not all trustees would be affected by the rule changes, so it was important to look at the specifics of the legislation before changing a client’s strategy.

“The first thing would be to identify whether the SMSF will be caught by the proposed changes — many SMSFs won’t be as the bill only captures new LRBAs... where the lender is a related party of the fund or the member has satisfied a condition of release with nil cashing restrictions,” Ms Formica said.

“Even if the member will have a proportion of the outstanding LRBA debt included in their TSB, that may not be disastrous if they weren’t planning on utilising any strategies for which TSB is relevant, e.g. making non-concessional contributions [or] utilising the catch-up concessional rules.”

For now, however, SMSFs preparing their annual return for the 2019 financial year still need to abide by previous reporting rules when it came to LRBAs, Ms Formica said.

“SMSFs should complete their 2019 annual return reporting the members’ proportion of the outstanding LRBA debt of all LRBAs, regardless of whether or not the LRBA will be captured by the new measures,” she said.

“We expect new instruction will be released if or when the bill receives royal assent, as otherwise the ATO will have no way of correctly calculating each member’s total super balance.”

 

 

Sarah Kendell
30 July 2019
smsfadviser.com

 

Pattinson Financial Services Pty Ltd ABN 17 121 851 376 is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd
ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523

Tel: +61 2 8850 6888 | Fax: +61 2 8850 6407 | Toll Free 1300 466 637 | PO Box 6253 Baulkham Hills BC NSW 2153

site By PlannerWeb