Extension of time to rectify non-commercial LRBA loans – deadline now 31 January 2017
In our previous Time For Action article the deadline for ensuring existing non-commercial limited recourse borrowing arrangement (LRBA) loans were put on commercial terms was 30 June 2016.
The ATO has now announced that the date for rectifying these LRBA related party loans made to SMSF trustees has been extended to 31 January 2017. SMSF trustees who wish to place their related party LRBA loans on commercial terms will be able to rectify the terms of the loan and make any necessary payments of interest or principal for the 2015/16 year by 31 January 2017.
This extension comes as a result of individual requests for more time to:
- ensure non-commercial loans are put on arm’s length terms;
- repay the loan; or
- refinance the loan with a commercial lender,
as required under the safe harbor guidelines issued by the ATO on 6 April 2016.
The ATO has also confirmed that it “will provide further information and illustrative examples to assist SMSF trustees and advisers to make decisions about relevant arrangements” by 30 September 2016.
For more information or advice please contact:
Dianne Sisak Penjalov
Senior Associate
T: 03 5226 8582
E: diannes@harwoodandrews.com.au
Nicole Stornebrink
Associate
T: 03 5225 5209
E: nstornebrink@harwoodandrews.com.au
