{"id":1893,"date":"2024-07-02T05:15:59","date_gmt":"2024-07-02T05:15:59","guid":{"rendered":"https:\/\/actinvest.com.au\/?p=1893"},"modified":"2024-07-02T05:15:59","modified_gmt":"2024-07-02T05:15:59","slug":"lrba-interest-rates-increase-for-2025","status":"publish","type":"post","link":"https:\/\/actinvest.com.au\/index.php\/lrba-interest-rates-increase-for-2025\/","title":{"rendered":"LRBA interest rates increase for 2025"},"content":{"rendered":"<p><span>The safe harbour interest rate for related party limited recourse borrowing has changed for 2025.<\/span><\/p>\n<p><img loading=\"lazy\" alt=\"\" height=\"317\" src=\"https:\/\/acctweb.com.au\/images\/ch-house-roof.jpg\" width=\"475\" \/><\/p>\n<p>.<\/p>\n<p>The new rate for real property has risen to 9.35 per cent from 8.85 per cent in 2023\u201324, a fraction of the 3 per cent rise that was implemented in the 2023\u201324 financial year.<\/p>\n<div>\n<p>Listed shares and units have also had only a 0.5 per cent rise from the previous year and are now sitting at 11.35 per cent. In four years, this rate has climbed from 7.10 per cent with the biggest increase implemented in the 2023\u201324 financial year.<\/p>\n<p>David Busoli, principal of SMSF Alliance, said it is imperative that related party borrowing be properly administered to avoid a breach of the non-arm\u2019s length rules.<\/p>\n<p>\u201cThe reason for this is that the penalties are draconian and essentially all taxable income and capital gains from the property will be taxed at the top marginal rate of 45 per cent,\u201d Busoli said.<\/p>\n<p>\u201cOnce triggered this situation can never be fixed. It\u2019s permanent. Note that it isn\u2019t just the interest rate that\u2019s relevant, it\u2019s the loan conditions as well \u2013 including principal and interest term and security.\u201d<\/p>\n<p>Busoli said with the financial year drawing to a close, it is prudent for SMSF trustees to check that any such loan has been treated correctly, alongside taking measures to ensure the new interest rate is incorporated for next year.<\/p>\n<p>\u201cOn a side note, I know that trustees often think their fund will be able to pay off the loan after they make planned non-concessional contributions at some time in the future,\u201d he added.<\/p>\n<p>\u201cAn obtuse and totally unjustified rule counts the balance of a related party loan as an asset for total super balance purpose potentially creating the absurd situation where the presence of the loan may, of itself, prevent the making of the contribution that would enable it to be paid out. Note that arm\u2019s length loans are also caught by this provision, but not until the member\u2019s benefits are unrestricted non-preserved.\u201d<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>Keeli Cambourne<br \/>\nJune 28 2024<br \/>\nsmsfadviser.com<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p><span>The safe harbour interest rate for related party limited recourse borrowing has changed for 2025.<\/span><\/p>\n","protected":false},"author":1,"featured_media":1894,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1893"}],"collection":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/comments?post=1893"}],"version-history":[{"count":1,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1893\/revisions"}],"predecessor-version":[{"id":1895,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1893\/revisions\/1895"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/media\/1894"}],"wp:attachment":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/media?parent=1893"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/categories?post=1893"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/tags?post=1893"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}