For SMSF related-party limited recourse borrowing arrangements (LRBAs) used to acquire real property, the ATO’s safe harbour interest rate is expected to be 5.10% for 2021-22 (unchanged from 2020-21). Practical Compliance Guideline PCG 2016/5 sets the safe harbour interest rate each year according to the Reserve Bank Indicator Lending Rates for banks providing standard variable housing loans for investors (being the rate recently published for May immediately prior to the start of the relevant financial year). This Indicator Lending Rate for May 2021 is 5.10%. Accordingly, the ATO’s safe harbour interest rate is expected to be 5.10% for 2021-22 (7.10% for listed securities). The ATO has confirmed these rates, on 21 June 2021, on its Website – Key superannuation rates and thresholds.

[Tax Month – June 2021]

[LTN 115, 18/6/21]