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ATO Safe Harbour Provisions for Related Party LRBA Loans
ATO Safe Harbour Provisions for Related Party LRBA Loans

ATO releases safe harbours for non-bank SMSF limited recourse borrowing arrangements. LRBA safeharbour interest rates.

Intello Robot avatar
Written by Intello Robot
Updated over 4 years ago

The Practical Compliance Guideline (PCG 2016/5) states that the ATO:

will accept that an LRBA structured in accordance with this Guideline is consistent with an arm’s length dealing and that the NALI provisions do not apply purely because of the terms of the borrowing arrangement.

At the risk of oversimplifying, essentially the terms are as follows:

Safe harbour LRBA interest rates

Interest rates can be found here:

http://help.intello.com.au/en/articles/4232795-ato-smsf-lrba-safeharbour-interest-rates

Fixed interest rate period

  • Trustees may choose to fix the rate at the commencement of the arrangement for a specified period, up to a maximum of 5 years.

More information

The following article also has information on using related party limited recourse borrowing arrangements: SMSF LRBA Borrowings from Related Parties

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