[Awan Hammad]

Hi Stephen

I will make general comments as do not know the $ amounts involved. I also assume the loans are not direct to a member or relative.

Section 85 of SIS states that a trustee cannot enter into a scheme to avoid the application of the IHA rules. You would need to consider this section.

The interest owing in my view should be added to the loan balance as part of the IHA calculation / test.

You may also have a breach of the sole purpose rule under section 62 of SIS.

You may also have a breach of section 109 of SIS if the interest has not been paid in accordance with the loan agreement.

Yes if the breach is less than 5% & less than $30,000 it may not be a reportable breach.

You need to work through the ACR reporting criteria at:

Auditor-actuary contravention report instructions – (Work out how to complete an Auditor/actuary contravention report (NAT 11239) including reporting criteria and examples)

Thanks

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