subscribe to our newsletter sign up

Considering an LRBA? Jump now


SMSFs thinking about entering into a Limited Recourse Borrowing Arrangement (LRBA) should think about jumping in now while the “last golden opportunity” remains.

That’s according to special counsel superannuation at SUPERCentral Michael Hallinan. Noting that the government has proposed measures which will impact LRBAs entered into on or after 1 July this year.

The measures mean any member’s shares of outstanding LRBA debts will be included in the calculation of their total superannuation balance, and this could have ramifications for the member’s ability to make contributions.

“While these measures may be modified or even not enacted, clients who are currently considering entering into an LRBA may see the benefit of making the jump and, ideally settle, before 30 June 2018, to minimise the risk of being caught,” Mr Hallinan said.

“Matters will be a little more complicated for off-the-plan purchases — as there is no drawdown of the loan until the property is close to completion — which may be in one or two years' time.”

Continuing, he noted that while there is currently no exception for transactions of this type, the consultation paper does suggest transitional rules for LRBAs could be instated.

Considering an LRBA? Jump now
nestegg logo
Promoted Content
Recommended by Spike Native Network
Jdub - And why, for God’s sake, introduce another obfuscating, bureaucracy-inspired name for a product for which there is already at least some.......
Dr Terry Dwyer, Dwye... - What rubbish! I resist them because they are misconceived and lazy policies, just as this "analysis" is lazy. A sensible policy would be to abolish.......
Elaine - The family home exclusion may create distortion, but I do believe it would be unfair to change it. For a start, how do you place a value on it?.......
Ian - If you want to talk about lazy options Labor will embark on re-distributing the income from the existing pie (or after a couple of years of Labor a.......