Source: Taxation In Australia Journal Article
Published Date: 1 Jun 2016
The ATO's release of PCG 2016/5 sails past interest rates, and now gives the ATO's position on the entirety of related party limited recourse borrowing arrangements, including requirements for principal and interest monthly payments, security, terms of lending, and standards for setting fixed and variable interest rates.
PCG 2016/5 also serves as a wake-up call to all advisers in the self-managed superannuation fund (SMSF) space to favour conservatism in strategies and to avoid making exceedingly ambitious strategic recommendations to clients who will not be able to float adequate r emedial action by 30 June 2016. The A TO has given advisers a bit of leeway and, with a bit of creative manoeuvring, many SMSFs can sail to the safe harbours with minimal frustration.
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