At the meeting, the group engaged in extensive discussion on the application of the new superannuation borrowing laws, especially in the context of sub dividing land, the use of a trust to hold property, repairs to property and the meaning of "arrangement" when considering whether the new laws are applicable.
The ATO was of the view that subdivided land generally comprises two separate assets, and when considering whether the new laws apply to an arrangement, that an arrangement is generally entered into when valuable rights and obligations are created.
The ATO acknowledged that the industry is facing difficult issues in applying the new borrowing laws and in some instances is seeking practical examples in order to formulate or confirm its response. Members that have faced issues in applying the new laws are encouraged to contact us at Tax Policy with details.
The group also considered the allocation of contributions and deductibility of personal super contributions in light of the amendments to section 23AG.