The complexity of the LRBA measures is still causing uncertainty among SMSF professionals, with BT reporting this as the top adviser enquiry during the June quarter.
BT technical consultant Tim Howard said LRBAs were the most topical enquiry for the June quarter.
“The changes can be explained in two parts. The first part relates to combining the outstanding LRBA debt to calculate a client’s total super balance,” said Mr Howard.
“It’s important to note that this measure is proposed at this stage only.”
The second part, he said, relates to the interaction between LRBAs and the transfer balance cap.
“Under this measure, SMSF clients will be required to record a credit against their transfer balance account where an LRBA held in retirement phase is repaid from funds held in accumulation phase,” he said.
This measure has broadly been introduced, he said, to prevent people transferring funds from accumulation to retirement phase via a loan repayment in an attempt to circumvent the transfer balance cap.
“This measure will likely only affect a minority of clients and it’s important to note that existing LRBAs in place, prior to 1 July 2017, will not be impacted,” he said.
“Due to the level of complexity in these measures, it’s timely to seek expert counsel so clients are aware of the changes. However, for now no immediate change is required to client strategies and it’s business as usual while we await any further consultation.”
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 21 Aug 2016Risks flagged with real estate appraisal valuesBy Miranda Brownlee
- 21 Aug 2016Lawyer challenges ATO view on two fund strategiesBy Miranda Brownlee
- 18 Aug 2017ATO locks in details, addresses panic on real-time reportingBy Katarina Taurian
- 18 Aug 2017Data feeds unreliable for new reporting, says mid-tierBy Miranda Brownlee
- 18 Aug 2017Tax component confusion spurs potential tax liabilitiesBy Miranda Brownlee
- 18 Aug 2017Contributions triple in June quarter, survey showsBy Staff Reporter
- view all
- ATO locks in details, addresses panic on real-time reporting
The tax office has addressed several points of confusion with the new events-based reporting regime, locked in key deadlines, and outlined w...read more
- Data feeds unreliable for new reporting, says mid-tier
With an estimated 20 per cent of SMSFs still encountering errors from data feeds, one mid-tier firm believes the ATO should allow SMSF pract...read more
- view all