“It appears abundantly clear from the FSI panel and a range of submissions, including the Reserve Bank and big four banks, that the days are coming to a close for the use of leverage inside super,” Mr Dunn said.

Mr Dunn believes leverage can only exist in the future where SMSF loans are provided by financial institutions that fall under the auspices of APRA.

“If you look at many of the topical issues around LRBAs, it have been with related-party arrangements – zero interest loans, use of SISR 13.22C-related trusts and more,” Mr Dunn said.

“In reality, the removal of related-party arrangements make things clear-cut. If a bank won’t lend on the arrangement, then it wouldn’t be arm’s-length. This appears consistent with the ATO’s changed views around non-arm’s length income (NALI) through a range of recently issued private rulings on related-party zero interest loan [LRBAs].

“It is important to note that this is a review and not a mandate for legislative change. However, following similar concerns in the Super System Review (Cooper Review) in 2010, one must have some concern as to whether the writing is on the wall for LRBAs.”