Author: Emma Partenza, Manager, TAG Financial Services
The 2021/22 interest rates have been officially released by the ATO for those funds complying with the safe harbour guidelines in PCG 2016/5 in respect to their limited recourse borrowing arrangements.
In good news, interest rates for real property and listed shares/units have remained the same as for the previous financial year, providing some certainty for funds and lenders. Monthly repayments therefore will remain consistent to the prior year.
Interest rates under PCG 2016/5 are:
| Real Property | Listed shares/units | |
| FY2021-22 | 5.10% | 7.10% |
It is important to note any investments held under LRBA outside of real property and listed shares are not expressly covered by the safe harbour guidelines and trustees cannot rely on the safe harbour provided for these loans. Trustees in this situation are required to benchmark and obtain evidence that their related party loans are on arm’s length and commercial terms.
If you have any questions please contact us on 03 9886 0800 or via email.
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Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686). Copyright 2021. Please do not reproduce without the expressed written consent of the author.