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Positive exclusion as LRBA amendments introduced to Parliament

31460 transform
Miranda Brownlee
26 May 2017 — 1 minute read

The government yesterday introduced its proposed amendments for limited recourse borrowing arrangements into Parliament, but has not included one of the major amendments in the bill.

Treasury Laws Amendment (2017 Measures No. 2) Bill 2017, which includes a number of technical amendments to the government’s superannuation reforms, was introduced into the House of Representatives.

The SMSF Association said the bill includes amendments that mean from 1 July 2017, any limited recourse borrowing arrangements (LRBAs) entered into on or after that date will require SMSF members to record a credit in their transfer balance cap where an LRBA held in retirement phase has its principal and interest repaid from funds held in accumulation phase.


“The fact that this change does not apply to LRBAs that are in place before 1 July 2017, refinancing of the outstanding balance of an LRBA or contracts entered into before 1 July 2017 is positive for SMSF trustees,” the SMSF Association said in a statement.

The association said importantly, the proposed measure to count a member’s outstanding LRBA loan balance towards their total superannuation balance was not included in the bill.

“Instead, the Treasury will undertake further consultation regarding this proposal before it is introduced to Parliament,” it said.

“We support the government’s move to undertake further consultation on this measure to ensure that it is appropriately targeted and does not undermine the ability for SMSFs to use LRBAs as a genuine retirement savings strategy.”

According to the SMSF Association, the bill also included amendments to the treatment of transition to retirement income streams (TRISs) where a TRIS holder satisfies a nil condition of release.

“When a member turns 65, their TRIS will automatically satisfy eligibility for the earnings tax exemption and be classified as in retirement phase,” it said.

“For other conditions of release, the member must notify the superannuation provider before the earnings tax exemption can be reaped. The bill also clarified that all TRISs will be eligible to access CGT relief.”

Miranda Brownlee

Miranda Brownlee


Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years. 

Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on: This email address is being protected from spambots. You need JavaScript enabled to view it.

Positive exclusion as LRBA amendments introduced to Parliament
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