Extended COVID-19 relief for SMSFs
On 23 September 2021, the ATO announced that a number of reliefs will be available to SMSF trustees in the 2019/20 and 2020/21 financial years due to the impacts of the COVID-19 pandemic.
SMSF residency relief
The ATO will not apply compliance resources to determine whether a fund met the residency test where the trustees were stranded overseas for more than two years due to the COVID-19 pandemic preventing them from satisfying the residency test.
For SMSFs that provided rental relief to tenants in a form of a reduction, waiver or deferral, which gave rise to a contravention of the super laws, the ATO will not take any compliance action against the fund provided:
- the relief was offered on commercial terms (having regard to State and Territory COVID-19 support measures) due to the financial impacts of COVID-19; and
- the arrangement was properly documented.
The ATO also plans to make a determination in the 2021-22 financial year to ensure that a rental deferral offered by an SMSF or a related party to a tenant does not cause a loan or investment to be an in-house asset in the current and future financial years.
Loan repayment relief
If loan repayment relief was provided to a related or unrelated party due to the financial impacts of COVID-19, the relief was offered on commercial terms and was properly documented, then the ATO will not take any compliance action against the SMSF.
In-house asset relief
If an SMSF exceeded the 5% in-house asset threshold as at 30 June 2021 due to the financial impacts of COVID-19, the trustees must still prepare a plan to reduce the market value of the fund’s in-house assets to below 5% by 30 June 2022.
However, the ATO will not take any compliance action against the SMSF if the trustees have not executed the plan by 30 June 2022 due to the financial impacts of COVID-19.