June 2016 Edition

In this edition:

Welcome

SuperStream deadline looming - 1 July 2016

Preparing for the end of the financial year - 30 June

Key borrowing deadline extended for super

Life insurance myths

SMSF trustees are expected to have their limited recourse borrowing arrangements (LRBAs) on commercial terms by 31 January 2017. The original deadline was set at 30 June 2016.

The ATO released Practical Compliance Guideline 2016/5 in April. This provided terms on which SMSF trustees may structure their loans to ensure their loans are structured compliantly. Since the release of the guidelines, the ATO has received several requests for an extension. By the end of September this year, the ATO committed to providing further information and "illustrative examples" to assist SMSF trustees to make decisions about their arrangements.

The ATO will not select an SMSF for an income tax review purely because it has an LRBA for the June 2015 financial year and prior, provided that the SMSF trustee ensures that any LRBAs that their superfund has is on commercial terms, or is alternatively brought to an end by 31 January 2017.

Further, payments of principal and interest for the year ended 30 June 2016 must be made under terms consistent with a commercial dealing by 31 January 2017.

Please contact your GCC team member if you have any queries or to assist you in planning for this change by 31 January 2017.