Level 4, 20 Grenfell Street,
Adelaide SA  5000

Phone: 08 8231 1888
Fax: 08 8231 3888

Email: admin@crase.com.au





 
Latest News
Hot Issues
Covid-19 resources
JobKeeper documentation ‘absolutely critical’ in ATO audit
ATO updates JobKeeper compliance approach
COVID-19 hotspots - tax time 2020
$150k instant asset write-off set for significant drop
Tax reform to feature heavily in PM’s JobMaker plan
Jobkeeper Fraud warning
ATO extends initial JobKeeper payment deadline
Boosting cash flow - ATO
Our website, your resources
ATO releases JobKeeper alternative test
Temporary Working from Home Expenses Rule
Minimum Pensions Halved – 2020 & 2021
More coronavirus support for landlords, commercial tenants
COVID-19: Early Childhood Education and Care Relief Package
What Covid-19 relief packages mean to you.
Now I’m working from home, what can I claim?
Global statistics plus Covid-19 updates
ATO clarifies COVID-19 rent relief concerns
Banks to defer small-business loan repayments for 6 months
Historic $130bn wage subsidy to cover 6 million workers
Stage 2 – Covid-19 stimulus package.
Covid-19 Update - Small Business
PM launches $17.6 billion virus stimulus plan
SG amnesty bill passes Parliament
ATO flags most common SMSF return mistakes
Expected GDP by country 2010 to 2100
ATO expands small business review pilot
A resource hub for our clients.
Risks when dating documents in 2020
Australian Taxation Office (ATO) debts may affect your credit rating
Statistical picture of Australia - Update
Absentee Property Owner – Tax Whack - Victoria
Articles archive
Quarter 1 January - March 2020
Quarter 4 October - December 2019
Quarter 3 July - September 2019
Quarter 2 April - June 2019
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Quarter 2 of 2019
Articles
ATO clears up FAQs about Single Touch Payroll
GST reporting: common errors and how to correct them
LRBAs, guarantees in need of review after property market falls
Victorian Property Valuation Cycle
Australia - toward EOFY 2019
Australian Taxation Office (ATO) expects 200,000 to miss out on refunds by failing to lodge
Biggest personal tax cuts in a decade a priority for Government
Government rules out GST changes following ATO report
ATO issues warning after ‘unprecedented’ spike in impersonation scams
Crypto transactions in ATO sights with new data-matching program
Government to establish $2 billion fund for small business lending
Small business corporate tax rates Bill is now law
ATO to double rental deduction audits to 4,500
ATO set to issue excess super contribution determinations
How's Australia going as we approach the election?
Single Touch Payroll (STP) is compulsory for all small businesses.
Federal Budget 2019 - Overview
How the 2019 Federal Budget affects you
FBT Reminder – Odometer Reading
‘Big awareness push’ underway as STP deadline approaches
GST collection on overseas goods at 300% of forecasts
The problem with getting to 53 years of age.
Lost Beneficiaries
New quarterly STP reporting method for closely held payees revealed
Some Australian figures to help on Budget night.
Employers hit with rolling SG audits as ATO toughens stance
LRBAs, guarantees in need of review after property market falls

With property markets taking a tumble in recent times, some SMSF clients may need to review the loan arrangements and guarantees they have, particularly where the loan-to-value ratio has significantly dropped, says an industry lawyer.



      


 


Speaking in a seminar in Sydney, DBA Lawyers director Daniel Butler said the property market has been under some stress recently, and while it may see a bit of a rebound with Labor’s property tax changes off the table, some SMSFs may be impacted by the recent fall in property values.


Mr Butler said the ATO has previously raised concerns about the amount of property loans held by SMSFs and guaranteed by assets outside of super such as the family home.


“If the market collapses, this is going to affect retirement savings and personal assets,” Mr Butler said.


Mr Butler explained that there were two types of guarantees: unsecured guarantees and secured guarantees.



“We have noticed a movement out there, typically with non-bank institutions, that they want that guarantee to be supported by a security or a charge or mortgage over the home or property owned by that guarantor,” he said.


While the fact that it is a limited recourse loan means that the security including any related guarantees should be limited to the value of the acquirable asset, but often they are not.


“You have to read and check it. I read one the other day that said that any asset you hold on trust is also up for grabs. Some of them also say, well, if it’s interest and cost and damages, we can also claim that back, even default interest,” he said.


SMSF professionals and their clients need to be very mindful of the extent of these guarantees, he cautioned, particularly if the client is entering negative equity.


The documents that deal with the guarantee for the loan arrangements may need to be reviewed for those clients who are in that risk category, he advised.


“That would be those that bought an apartment and it’s now close to negativity equity and the they’re getting light on the loan-to-value ratio (LVR) because the property value has sunk but the loan is still there and they’re no longer over their 70 per cent threshold,” he said.


This also needs to be looked at with related-party loans, because if the LVR is no longer under the 70 per cent, then they may need to restructure.


SMSF practitioners should offset their liability by encouraging their clients to get these documents reviewed. 


 


 


Miranda Brownlee
22 May 2019
smsfadviser.com


 




23rd-June-2019
      Site By AcctWeb