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SMSF must pay full interest amount

Posted on 21 August '12 by , under General News.

In regards to related party loans, Self-managed super funds (SMSF) must pay the full interest amount,  despite  the rate charged or risk having the expense treated as a contribution.

If the below market rates of interest could be charged on related party loans to SMSFs it’s just that the agreed rate of interest had to be paid.  For example, the related party loan is at 6 per cent, the trustee must pay 6 per cent interest.

In other superannuation news the Federal Government has enacted the regulation allowing certain excess contributions to be refunded to fund members.

Under the new rules announced in the 2012 budget a breach of the concessional contributons caps of up to $10,000 may be refunded to eligible individuals.