Tag Archives: Lend

Can You Lend Money To Your Smsf At A Low Interest Rate ?

A recent interpretative decision by the ATO (ATO ID 2010/162) has caused some comment in the self managed superannuation industry, as on first look it appears that it allows a related party of a SMSF (say a member, or a member relative) to lend money to a SMSF under a limited recourse borrowing arrangement, and to do so under terms that are favorable to the SMSF. For example, say a member of a SMSF lends money to their SMSF under a limited recourse borrowing arrangement, but only charges the fund a very low interest rate, well below the normal market “arms length” rate.

Firstly, lets look at the actual issue the ATO raised, as follows:

“Does a self managed superannuation fund (SMSF) trustee contravene section 109 of the Superannuation Industry (Supervision) Act 1993 (SISA) if it borrows money from a related party of the SMSF under a limited recourse borrowing arrangement on terms favorable to the SMSF?”

(Note: Section 109 of the SISA deals with the issue of transactions where the other party to the transaction is not at arm’s length to the SMSF e.g. a fund member. The provision requires that the terms and conditions of the transaction must not be more favorable to the other party than would be reasonably expected if the parties were at arm’s length.)

The ATO answer was no, this situation does not contravene section 109. Specifically :

“The terms cannot be more favorable to the related party than would have been the case had the parties been dealing at arm’s length, but there is no contravention of section 109 of the SISA if the terms are more favorable to the SMSF.

Do you see the distinction ? The related party cannot get favorable treatment, but the SMSF can.

In our example, say Jim lends money to his self managed super fund under a limited recourse borrowing arrangement, but only charges the fund 2% p.a. interest, when the going market rate if they had been dealing on an arms length basis was say 8% p.a.

Jim (as the other party) is no better off, as he is getting less interest than he normally would, but the SMSF is better off as it is paying less interest. This ATO decision is highlighting the fact that section 109 only deals with the fact that the “other party” (in this case Jim) cannot be better off, but there is no restriction on the SMSF being better off.

So does this mean its open slather on this sort of thing ?

Well, not necessarilly. You always have to remember with DIY superannuation funds, just because something is OK under one provision, it does not mean it is OK under all SIS provisions. What you may well find is that the difference between the actual rate charged, and the arms length market rate may be deemed as a contribution.

Townsends lawyers have the following to say about it, and we think its prudent counsel:

“The Interpretative Decision while technically correct suggests that s109 is in need of reform. And most likely will be reformed. While it is possible to shift value to the SMSF using s109, the ATO has also specified in TR2010/1 that shifting value to an asset owned by the provider is a contribution. (Though the concept of a deemed contribution, in the absence of any market value rules, is more in the mind of the Commissioner than supported by any legislative text). Alternatively, the Commissioner could treat the income arising from the asset acquired by the mates rates loan as being non-arms’ length income and taxed at 45%. There is more legislative substantive supporting this claim than the deemed contribution.

So before moving into mates rates loans, a close look at s295-550 of the Income Tax Assessment Act, 1997 is highly recommended.”

Get advice from SMSF Review to start your DIY Superannuation. Most comprehensive online resource dedicated entirely to educating SMSF trustees. For more information or to enjoy our free membership offer, visit SMSF.

Lend A Classical Look To Your Bedroom By Opting For Wooden Sleigh Beds

Using a natural and eco friendly material like wood is gaining ground once again. The curvatures as well as the bends are the main stay of most furniture particularly wooden beds . An exquisitely carved intricate design or the subtle curved look adds on to the elegant look instead of it being merely functional.

Wooden sleigh beds have also gained in popularity of late. The slightly bigger headboards in comparison to the footboards make it look somewhat similar to a sleigh, hence the name. Both the head as well as the footboards consist of carvings which makes it look antique and classical at the same time. Another prominent feature of such beds is the top which rolls outwards.

It is possible to be confused by the enormous choices available when it comes to the wood. While sleigh beds can be made of almost any type of wood, a hardwood serves the purpose admirably making it both durable and strong. The wood from the Mahogany tree is considered to be ideal and can easily outlive you. The rich red tinted wood will also help to enliven your bedroom making you look forward to a good nights sleep.

A particularly interesting fact is that the sleigh beds can be traced back to the times of the Romans and Greeks who were reckoned as the rulers of the world in the ancient times. The same style grew popular once more in the 1800s when it was used by both the French as well as the American cultures. The modern day has a plethora of sleigh beds to choose from too. The commonest types of sleigh beds available now can be categorized as:-

Antique- These are completely traditional in appearance and will lend a unique and classical look to your bedroom. The method of treating the wood properly is extremely important as the durability of your coveted piece of furniture is totally dependent on the process. However, you can safely use it for generations with minimal care.

Modern- Most of the furniture manufacturers also make a more modern form of the traditional bed which is more appropriate for the modern style of living. Several luxury homes use sleigh beds which are more functional instead of being cumbersome. The wood, crafting and the functionality are not overlooked either and it is perfectly possible to get it custom made.

The framing along with the boards on either end of the bed is an integral part of the sleigh bed. Bigger sized beds often have an extra central leg as well. However, opting for this kind of bed will not be a wise decision if you do not have much space to spare. An inordinately tall and hand crafted headboard is likely to become the center of attention if you can manage to place it bang in the middle of your roomy bedroom. A bed which is not the dominant feature would have to do with a shorter headboard, on the other hand.

Glowing Ink Can Lend New Depth To Your Prints

Have you been looking for a new, fun way to take some of your latest creations to the next level?Your search is over.Glowing printer ink is a great way to add some pizazz to greeting cards, informational newsletters, decorations for a party or the holidays, signs, or even t shirts. The only limitation is your own creativity, and the best thing about glowing ink is that you don’t need to buy special paper to make it work.You can employ whatever you have hanging around. There are plenty of manufacturers that sell this ink, but if you want to further explore your own craftiness, try making the ink yourself.

You’ll have to make a couple shopping stops in order to make the glowing ink. At your local craft store (or the craft section of a retail store), buy some glow-in-the-dark powder.The next thing you’re going to need is an ink refill kit.If you don’t, a quick trip to an office supply store or even online will do.Ensure that your printer is compatible with this glowing ink kit.And lastly, you’ll want a syringe to transfer the ink from the ink cartridge to the mixing bowl and back.

In a microwave-safe bowl, place three teaspoons of printer ink and one-fourth of a teaspoon of the glow in the dark powder. Microwave for about 30 seconds to dissolve the powder, then stir well to make sure that all of the powder is incorporated into the ink.Allow the ink mixture to cool off.To transfer the ink mixture back into your ink cartridge, you should use the syringe. Put the syringe into the refill holes of the cartridge (check the refill kit instructions to find out where the refill holes are located).Before attempting any printing, you should use your printer’s clean cycle.Glowing will not be possible unless you expose the ink to the light for a few minutes after it has been printed out.

That’s it! You can now unleash your creativity and make your projects really stand out.Although it seems as though Halloween projects are the most popular projects to be undertaken with these special inks, there are many other uses, like decorations for your home on a summer evening.You should experiment with adding the glow in the dark effect to multiple ink colors.Your artwork is bound to draw surprised admiration, so just be creative and have fun while you let your imagination run wild! Tony is a blogger and technology enthusiast who really enjoys writing about the newest printer ink cartridge trends.

Vision Defense Will Lend Your Eyes A Much Needed Break

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Use an Outdoor Cat House to Lend a Hand to Stray Cats

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Lend Fibromyalgia Support & Make a Difference in Somebody’s Life

For some people experiencing a multitude of illnesses, along with pain related to soft tissue which is called fibromyalgia, it may seem like the end of the world. Because the arthritis-related condition can cause an individual to feel gnawing pain all over and affects life in untold ways, obtaining fibromyalgia support through fellow sufferers canContinue Reading

Lend Street Financial @ Finovate Spring 2011 Conference

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Peter Renton: Peer to Peer Lending Expert – Lend Academy Podcast

Peter Renton: Peer to Peer Lending Expert – Lend Academy Podcast from Lend Academy Podcast Price: USD 0 View Details about Peter Renton: Peer to Peer Lending Expert