SMSFs win on LRBAs
The Government has signalled it will not be moving to tighten up on self-managed superannuation funds (SMSFs) and Limited Recourse Borrowing Arrangements (LRBAs) following receipt of a report form the Council of Financial Regulators.
The report found that LRBAs form a relatively low proportion of overall SMSF assets with only around 8.9 per cent of SMSFs now having an LRBA, holding 5.2 per cent of total SMSF assets or just 1.4 per cent of total superannuation assets.
The Treasurer, Josh Frydenberg said that in light of this finding, the Government would not be making any changes to LRBAs and would instead be requesting that the Council of Financial Regulators and the Australian Taxation Office (ATO) continue to monitor the situation and report back in three years.
Frydenberg noted that the report on LRBAs was consistent with the findings of the Productivity Commission’s (PC’s) recent report on superannuation, which had found that LRBAs did not currently pose a material systemic risk.
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