General / Jun 15, 2020

LRBA & Income Tax Return Reporting

Brent Jones
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When it comes to the annual tax return, the latest reporting requirements state that applicable LRBA balances must be reported to the ATO by using the new label within the member section of the annual return (Part F – Label Y). This will report the outstanding LRBA amounts for each applicable member, which will be used to calculate a member’s TSB. Consequently, for funds with more than one member, the total outstanding LRBA amounts will be calculated and apportioned in accordance to their member balances and allocated to each applicable member.

To calculate the appropriate reporting figure use the following formula (all calculated at 30 June):

Total Super Balance = Members balance / Total funds asset balance) x LRBA Balance

Proportioned LRBA balances are required to be reported in the annual return if one of the following conditions are met:

  • A new LRBA agreement is entered into on or after 1 July 2018, or
  • The refinancing of an existing LRBA and the refinanced amount increases on or after 1 July 2018, or
  • The refinancing of an existing LRBA to acquire different assets on or after 1 July 2019

If an LRBA has met one of the above conditions, a member must then have met a condition of release for the LRBA amount to be included in “Part F – Section Y” of the annual return. These include:

  • Reached preservation age
  • Retired
  • Permanently incapacitated
  • Terminal medical condition

Please note that the member only has to meet a condition of release prior to the reporting date. They do not need to currently meet that condition of release. For example, they may have once retired and have since returned to work. Thus this member would have to record the LRBA amount under the annual return.

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