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Matt Little

Jul 29, 2021

Title Transferred before LRBA Paid Off.

in SMSF Technical Forum

I am completing an audit of a Fund that had a LRBA with a related party. The Trustee (who completed their own loan repayments calculations, etc) was of the belief that the LRBA had been fully paid off, and subsequently arranged for the title of the property to be transferred from the Bare Trustee Company to the Corporate Trustee.

It was later discovered by their accountant when completing their yearly accounts that unfortunately their calculations were incorrect, and an amount of around $2250 was still required to paid back by the end of the tax year.

Can you please advise what are the issues with this situation. Thanks

1 answer0 replies

Comments (1)

THE AUDITORS INSTITUTE

Jul 30, 2021

Hi Matt

My view is to adopt a practical approach and just make sure the amount owing is paid by the Fund given the amount involved. If the amount owing needs to be recorded in the financial statements of the Fund I would record it as a sundry creditor.

As an auditor I would also raise it in a management letter.

Thanks

SMSF AAA