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Are you excited for the new LRBA Disclosure?

*News Flash* 2017 SMSF Tax Return Released

Are you excited about the New LRBA disclosure?

In a move of greater anticipation than a Star Wars trailer teaser, the ATO has released the 2017 SMSF annual return and instructions.

Of interest are the new disclosure requirements for LRBA arrangements.

In our previous blog we discussed the ATO’s safe harbour guidelines on related party LRBA’s and the steps Trustee’s should have taken prior to 31 January 2017 to comply.

There are two new disclosure questions in the 2017 return which will allow the ATO to target reviews of such LRBA’s.

Section H Question 15e asks two questions:

  1. If the fund had an LRBA, were the LRBA borrowings from a licensed financial institution?
  2. Did members or related parties of the fund use personal guarantees or other security for the LRBA?

Whilst question two will be a common “Yes” to all LRBA’s, related party LRBA’s will predominately answer “Yes” to question one.

The ATO will no doubt use this question to pick SMSF’s for review of their related party arrangement.

Advisers should again review affected clients and seek advice where the terms of a related LRBA are outside the ATO safe harbour guidelines.

If you require assistance, Trisuper can offer a diagnostic review and report service on individual related party LRBA’s.   Full details can be found here.

Of course if you have any question please contact me here.

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