SMSF practitioners should be well across the scope of their engagement with clients in light of the ATO’s new LRBA guidelines, with some potentially being in a “grey area” in terms of their obligations.
Speaking to SMSF Adviser, DBA Lawyers director Bryce Figot said he believes it is a “really big deal” that professionals are “on the front foot” with the new ATO safe harbours for related-party LRBAs.
Mr Figot noted that the scope of engagement with each client can vary greatly, from once-off advice to an ongoing relationship where the professional agrees to keep clients up to date with ad hoc regulatory changes.
However, he suggested best practice, particularly in instances where the scope of engagement is not entirely clear, is to notify clients of the ATO’s guidelines as quickly as possible.
“I dare say quite a few people do fall within a grey area, and long story short, they probably should err on the side of caution and do something to contact their clients,” Mr Figot said.
Although the ATO recently called for calm following the release of the guidelines, trustees are nevertheless expected to have their LRBAs structured on commercial terms by 30 June this year.
This means loan repayments will be expected to be in line with commercial terms for all of this financial year.
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