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What arrangements are the ATO concerned about?

Arrangement 1 – Property investments using Limited Recourse Borrowing Arrangements (LRBAs)

The ATO is concerned where an SMSF enters into a LRBA to acquire an asset, and the arrangement has at least one of the following features:

  • The borrowing and the title of the property is held in the individual’s name and not in the name of the trustee of the holding trust, and the SMSF funds part of the initial deposit and the ongoing loan repayments;
  • The title of the property is held by the SMSF trustee not the trustee of the holding trust;
  • The trustee of the holding trust is not in existence and the holding trust is not established at the time the contract to acquire the asset is signed;
  • The SMSF acquires a residential property from the SMSF member;
  • The acquisition comprises two or more separate titles and there is no physical or legal impediment to the two titles being dealt with, assigned or transferred separately; or
  • The asset is a vacant block of land.  The SMSF intends to use the same borrowing to construct a house on the land.  The land is transferred to the holding trust prior to the house being built.

Motor vehicle data matching program

The ATO has obtained, or will obtain, data identifying all motor vehicles sold, transferred or newly registered in the 2011/2012 and 2012/2013 income years where the transfer and/or market value is $10,000 or greater from the following state and territory motor vehicle registering bodies:

Roads and Maritime Services, NSW;

  • Queensland Department of Transport and Main Roads;
  • VicRoads Licensing and Registrations Operations;
  • Tasmania Department of Infrastructure, Energy and Resources, Registration and Licensing Branch;
  • South Australia Department for Transport, Energy and Infrastructure;
  • Western Australia Department for Transport;
  • Northern Territory Department of Lands and Planning; and
  • ACT Road Transport Authority.

Data relating to approximately 2.8 million individuals will be matched against taxpayer records to identify those participating in the cash economy, and/or those who may not be declaring all their income or deliberately avoiding their tax obligations.

Those identifies as being at risk of potentially skimming some or all of their cash takings, running part of their business ‘off-the-books’, or in other ways not reporting all their income, the ATO recommended they be contacted so the taxpayer can make a voluntary disclosure of any under-reported amounts. 

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