Latest News

Hot Issues
spacer
State and Federal COVID-19 support --- January - 2022
spacer
Beware section 99B
spacer
ATO provides further clarity on DIN process
spacer
Unpaid client invoices placing greater pressure on SMEs
spacer
10 top global corporations since 1998
spacer
Increase in the number of SMSF members
spacer
Single Touch Payroll (STP) – Phase 2
spacer
ATO reiterates tax system incentives
spacer
Our 2021 Advent Calendar.
spacer
ATO flags focus areas for combating $33.5bn ‘tax gap’
spacer
Business Resources - Grants, Assistance, Resources and more.
spacer
Employee Christmas Parties and Gifts – Any FBT?
spacer
FBT – Christmas Parties and Taxi Fares
spacer
How the best firms are supporting the mental health of their employees
spacer
Asian Economies (1960 - 2020)
spacer
Making the festive season less taxing
spacer
Why more Millennials are turning to SMSFs
spacer
Company directors must register - all you need to know
spacer
Hardship priority processing of tax refunds
spacer
Business valuations: Tips, tricks and traps
spacer
Government moves to scrap SG $450 threshold
spacer
World's most productive countries
spacer
Superannuation changes - Superannuation guarantee (SG)
spacer
Unused Super Contributions
spacer
Main residence exemption myths and misconceptions
Article archive
spacer
Quarter 4 October - December 2021
spacer
Quarter 3 July - September 2021
spacer
Quarter 2 April - June 2021
spacer
Quarter 1 January - March 2021
spacer
Quarter 4 October - December 2020
spacer
Quarter 3 July - September 2020
spacer
Quarter 2 April - June 2020
spacer
Quarter 1 January - March 2020
spacer
Quarter 4 October - December 2019
spacer
Quarter 3 July - September 2019
spacer
Quarter 2 April - June 2019
spacer
Quarter 1 January - March 2019
spacer
Quarter 4 October - December 2018
spacer
Quarter 3 July - September 2018
spacer
Quarter 2 April - June 2018
spacer
Quarter 1 January - March 2018
spacer
Quarter 4 October - December 2017
spacer
Quarter 3 July - September 2017
spacer
Quarter 2 April - June 2017
spacer
Quarter 1 January - March 2017
spacer
Quarter 4 October - December 2016
spacer
Quarter 3 July - September 2016
spacer
Quarter 2 April - June 2016
spacer
Quarter 1 January - March 2016
spacer
Quarter 4 October - December 2015
spacer
Quarter 3 July - September 2015
spacer
Quarter 2 April - June 2015
spacer
Quarter 1 January - March 2015
spacer
Quarter 4 October - December 2014
Quarter 2 of, 2016 archive
spacer
Reminder – Salary and Wages PAYG Shortfall
spacer
$20,000 Asset Write Off Reminder
spacer
Danger for buyers of Australian property of $2 million plus
spacer
Budget 2016-17
spacer
FBT Time
spacer
Fringe Benefits Tax – Company Holiday Home
spacer
Fringe Benefits Tax – Nil
spacer
Estate Planning - early inheritance
spacer
ATO issues SMSF tax warning
spacer
ATO seeks to dispel LRBA panic
spacer
Financial tools your family and friends can use.
spacer
$20,000 Asset Write Off Reminder
spacer
Tax office issues warning on imminent rule change
spacer
Age Pension means-test prevents rational decision-making
spacer
Locking Up Bank Accounts
spacer
ATO figures show property investors missing out on tax breaks
ATO seeks to dispel LRBA panic

 

The ATO has expressed its concern that the SMSF community is misinterpreting the courses of action they need to take following the release of new LRBA guidance, and has set out to dispel various concerns.

       

Earlier this month, the ATO released Practical Compliance Guideline (PCG) 2016/5, which sets out the safe harbour terms on which SMSF trustees may structure their LRBAs consistent with an arm's-length dealing.

Since the release of the PCG, ATO assistant commissioner Kasey Macfarlane said she has noted some confusion via various social media channels about the intention and direction of the guidelines.

“The safe harbours and the PCG itself […] don’t set a minimum benchmark that all LRBAs have to comply with,” she told AccountantsDailysister publication SMSF Adviser.

“It is a safety net, if you like, so if SMSF trustees choose to apply it they can have certainty that the non-arm’s-length income [NALI] provisions won’t apply to their particular arrangement if the structure is within those parameters.

“If they choose not to apply the guidelines, and they have an arrangement that is structured outside of the parameters of the guideline – that doesn’t mean that automatically the NALI provisions apply.

“It just means that they don’t have the certainty of that safety net […] and they just need to be able to demonstrate that their arrangement nevertheless is consistent with a commercial dealing.

“Not everyone has to run out and restructure their arrangements.”

Ms Macfarlane also noted some concerns around the interest rates used, which are benchmarked against the Reserve Bank’s Indicator Lending Rates.

“People are saying ‘well, I can get a better rate than that from the bank’. I suppose it comes back to this issue again: this is a safe harbour safety net, so there are some other options out there if people don’t want to apply the guidelines,” she said.

“They can either go out and restructure and refinance their loans with a commercial lender on those favourable rates or they might just want to restructure their arrangement with an existing party based on the terms that the commercial lender will provide to them,” she said.

Acknowledging that there are some trustees and professionals concerned that they don’t have enough time to restructure an existing loan, Ms Macfarlane reiterated that the ATO is encouraging such parties to come forward.

“We would expect that when people come to us that they would be able to demonstrate and have some evidence that they have made some progress towards restructuring arrangements and they do have an intent to make required payments and interest payments,” she said.

“Now obviously we have to look at each on a case-by-case basis, but I expect that we would take a pragmatic approach in those types of circumstances. A pragmatic and reasonable approach,” she said.

“People should be starting to take action now and starting to take steps to do what they need to do to revise or restructure their arrangements. If they do have those concerns about not being able to meet the 30 June deadline, we encourage them to come to us now rather than waiting until June to come and approach us,” she said.

Ms Macfarlane also made note of the additional concession that applies to SMSF trustees, in that if that existing loan arrangements between related parties are structured on commercial terms by 30 June, the ATO won’t seek compliance action for the 2014-15 year or years prior.

 

KATARINA TAURIAN -
Tuesday, 26 April 2016
www.accountantsdaily.com.au

 

© O'Brien and Partners 2011 - All Rights Reserved | 91 Station Street, Malvern VIC 3144 | Tel: 03 9509 3911 | Fax: 03 9509 3922