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Risks of borrowing are all related

Publication date: 09 Sep 13 | Source: PROFESSIONAL PLANNER

Issue: Issue 54 June 2013

Pages: pp 36-37


Limited recourse borrowing arrangements in a self managed super fund (SMSF) are now becoming well accepted, and the ATO has stated that there is nothing prohibiting the lender from being related. This article explores the latest on the ability of a related party to lend to the SMSF on terms that are favourable to the SMSF, and concludes that non-arms length income concerns are probably the biggest hurdle that currently exists and looks at a recent ATO private binding ruling considering a nil-interest related party SMSF loan.

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Author profile

Bryce Figot CTA
Bryce is a Director at leading SMSF law firm DBA Lawyers. He practices predominantly in taxation and superannuation law, particularly the law of SMSFs. He is regularly quoted and published in the Australian Financial Review, the Herald Sun, CCH and LexisNexis publications, and elsewhere in the financial press. He presents extensively to accountants, financial planners and lawyers Australia-wide. Bryce has worked with DBA Lawyers since 2003. He holds both a bachelor degree and a masters degree in law and is an accredited Specialist SMSF Advisor. - Current at 10 December 2015
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