The federal government has announced it does not agree with the Financial System Inquiry’s (FS) recommendation ....
.... to prohibit limited recourse borrowing arrangements (LRBA) by superannuation funds.
At this time there is not enough evidence to justify a major policy change.
What was the mischief?
What is the loss of revenue, if any?
Many advisers of SMSF struggled to find any justification for this perceived problem and it seems that the Government agreed. Therefore, trustees and financiers can continue with structures that include SMSF borrowing.
The government does recommend the monitoring of LRBAs by the Council of Financial Regulators and the Australian Taxation Office will review any risk associated with LRBAs, and report back in three years.