Treasury has revealed to the SMSF Association it is working with the ATO to develop some “rapid response” guidance with regard to the ban implemented on limited recourse borrowing arrangements (LRBA) used to acquire residential property inside a super fund.
The action was confirmed during a meeting the professional body held with Treasury recently to discuss the urgent need for clarity and guidance on the new LRBA prohibition.
Treasury committed to the initiative after recognising the transitional period for the amended gearing rules was short. To this end, the ban on LRBAs is scheduled to take effect from 10 August onwards.
No date was provided as to when the guidance would be made available, but it is expected to be released in the very near future.
The material to assist SMSFs with a current LRBA or one that is in the process of being finalised will address issues such as the elements required to be in place for a gearing arrangement to be valid before the 10 August deadline.
The SMSF Association welcomed the news about the impending guidance for trustees.
“As the LRBA amendments came from the crossbench, there was no accompanying explanatory memorandum setting out the intent, objectives and operation of the new law. This makes the publication of this guidance vitally important,” SMSF Association head of policy and advocacy Tracey Scotchbrook said.
Scotchbrook added it was a great relief to the industry body the guidance is being drafted, but recommended it be published with the utmost urgency.
According to the association, the sector needs to know how key aspects of the measure will apply as soon as possible, given the close proximity of the implementation date.
It indicated the guidance will allow the change to be managed with more certainty by SMSF practitioners, trustees and credit providers, particularly in situations where transactions are expected to settle after the transitional period.
The SMSF Association will be presenting at the SMSF Trustee Empowerment Day 2026. Click here to secure your seat in either Sydney or Melbourne.