ATO called on for ‘consistent approach’ to LRBAs
During a meeting of the Superannuation Industry Relationship Network, key industry representatives called on the ATO for more clarity on LRBAs and non-arm’s length income.
According to an ATO document, the Superannuation Industry Relationship Network (SIRN) met via teleconference on 29 May 2014 with 22 attendees from the SMSF industry and the ATO.
The consultation forum was established following media coverage about a private binding ruling (PBR) concerning LRBAs, NALI and low or zero interest loans, the document stated.
During the meeting, attendees said a “consistent approach” is required by the ATO on SMSF borrowing, adding the industry needs to be clear on the ATO’s position to issue accurate advice.
Attendees also called for guidance from the ATO regarding the point at which an SMSF loan becomes uncommercial.
The ATO was also called on to clarify its position on PBRs, with questions being raised about the correctness of the legal analysis in PBRs.
“The ATO agreed to review the ATO’s position around the PBR approach and will consult further with members on the development of guidance material,” the document stated.
Speaking to SMSF Adviser, senior consulting lawyer at SMSF Law Shane Ellis said advisers are at present without a “sound base” to advise clients from.
“The public needs the ATO to act swiftly in matters such as these where the issue is not clear and has been brought about by the ATO moving the goal posts,” he added.