Limited recourse borrowing arrangements (LRBA) used to acquire assets within superannuation will be scrapped if the recommendations of the Financial System Inquiry (FSI) report are followed.
One of the recommendations is the elimination of LRBA use within super funds on the grounds that doing so would prevent the unnecessary build-up of risk in the superannuation system and the financial system more broadly.
The FSI consider that there should be greater focus on superannuation as being a vehicle for retirement savings rather than a means to achieve broader wealth management goals. Â There are many contrary views.
In recent years, it has been common place for any negative impact legislative change to be forward dated.
So, anyone contemplating LRBA would be well advised to consider all the issues now, and well before the May Federal Budget.