Hot Issues
spacer
COVID-19 resources -Update July 2020
spacer
'But how will we pay for this?'
spacer
SMSFs urged to review leases before granting rent relief
spacer
New financial year to bring new rules for super
spacer
Extra Tools & Resources for our clients.
spacer
Ways to outsmart your cognitive biases
spacer
COVID-19 cuts risk pension pain
spacer
New laws prompt review of SMSF estate plans
spacer
SMSF sector grows, new fund numbers drop
spacer
‘HomeBuilder’ grants now available.
spacer
Related-party property development concerns — Part 1
spacer
The value of financial advice
spacer
A super catch-up plan
spacer
Court decides on taxable capital gains distributions
spacer
SMSF liquidity lessons learnt from the pandemic
spacer
Do your investment goals stack up?
spacer
Retirement income framework deferred due to COVID-19
spacer
How early super withdrawals add up
spacer
AFP teams up with ATO, Treasury in COVID-19 tax fraud taskforce
spacer
ATO extends initial JobKeeper payment deadline
spacer
ATO releases JobKeeper alternative test
spacer
Our Website, your resources
spacer
Consumer satisfaction up for SMSFs, down for industry funds
spacer
Superannuation for younger investors
spacer
How to stay the course in retirement
spacer
COVID-19: Early Childhood Education and Care Relief Package
spacer
Government announces mandatory code for rent relief
spacer
ATO clarifies COVID-19 rent relief concerns
spacer
SMSFs in the ATO firing line
spacer
Avoid SISR traps in early access to super scheme
NALI, LRBA measures pass Parliament

The government’s further restrictions to non-arm’s length income and LRBAs have passed Parliament, meaning SMSF trustees approaching retirement with an outstanding loan on a property will need to consider their options when planning contribution strategies for the 2020 financial year.

       

 

The Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2019 passed the Senate on Thursday after passing through the House of Representatives earlier this week, meaning the bill now only needs to receive royal assent before it becomes law.

The bill contains a measure to include the value of outstanding LRBAs in a member’s super balance if the loan is from a related party or the member has met a full condition of release, and where the LRBA was entered into from 1 July 2018 onwards.

It also includes further restrictions to non-arm’s length income, meaning income earned at arm’s length can still be taxed as NALI if a member has incurred an expense in relation to that income which was not at arm’s length.

Additionally, the bill introduces an option for high-income earners with multiple employers to opt out of super guarantee contributions for part of their employment.

Commenting on the new laws, Australian Executor Trustees senior technical services manager Julie Steed said affected SMSF members would need to factor their LRBA balance into their total super balance at the end of the last financial year, as well as make changes to their portfolio if needed.

“The inability to make certain additional contributions may be a catalyst for some members to conclude that the LRBA doesn’t suit their needs any longer,” Ms Steed said.

“Some funds may look to sell the asset and repay the loan, and some trustees who currently have diversified holdings which include a property with an LRBA may decide to liquidate cash and shares to pay down their LRBA and retain the property, leaving them with less diversified investments.”

In regard to the NALI changes, SuperConcepts general manager of technical services and education Peter Burgess said trustees would need to be diligent going forward in ensuring any services performed for their own SMSF were provided at arm’s-length rates.

“From now on, to avoid these new NALI measures being applied, trustees who provide services to their fund will either need to be able to show the amount charged for any such services is not less than that which would be expected to be charged between parties dealing at arm’s length, or the service provided was purely internal — for example, where the trustees undertake bookkeeping activities for no charge in performing their trustee duties,” Mr Burgess said.

He added that the changes overall would close the remaining loopholes by which trustees might have been able to circumvent the super reforms introduced in 2017.

 

 

Sarah Kendell
20 September 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