SMSF Association Submission
The SMSF Association has lodged its submission on limited recourse borrowing arrangement (LRBA) policy with Treasury as input to the Council of Financial Regulators’ review of LRBAs. The recent member survey on LRBAs provided the Association’s policy team with valuable insights on how SMSFA members are using LRBAs as part of client strategies on whether any policy changes are needed.
The results of the survey can be viewed here – https://www.surveymonkey.com/stories/SM-VV2JTB8/
It was clear from the survey that the members who responded believed that the Association should be proactive in ensuring that LRBAs remain a viable option for SMSF trustees. Accordingly, in our submission to Treasury we put forward two key integrity measures that should reduce systemic risks potentially caused by LRBAs: banning the use of personal guarantees in relation to LRBAs and raising SMSF advice education requirements to limit the operation of property spruiking firms targeting SMSFs. The Association, on the advice of its members, did not suggest limiting the asset types that can be acquired under an LRBA or introducing minimum SMSF asset diversification requirements.
Read the SMSF Association submission below.