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ARTICLE · 10 FEBRUARY 2018

Treasury releases proposed measures to include LRBAs in total superannuation balances

Cooper Grace Ward
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A Treasury consultation paper has proposed new integrity measures, one of which will affect SMSFs entering into LRBAs.

AustraliaFinance and Banking
Scott Hay-Bartlem
Scott Hay-Bartlem
Clinton Jackson
Clinton Jackson
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A Treasury consultation paper issued on 11 January 2018 includes new integrity measures, one of which will affect SMSFs entering into new borrowing arrangements (LRBAs) after 30 June 2018.

The proposal is that, where an amount is outstanding under an LRBA, there will be an additional amount added to a member's 'total superannuation balance'. Broadly, this will be the proportion of the assets funded by the borrowing that relate to that member's account.

Treasury's concern is that SMSF members will withdraw money from their SMSF and then loan it back, which means a member's total superannuation balance reduces by the amount withdrawn while the effective amount invested does not.

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