COVID-19 relief for SMSFs extended to 2021-22
The ATO has extended to 2021-22
the following administrative concessions for SMSFs impacted by COVID-19 that were offered for the 2020 and 2021 financial years:
- SMSF residency test — if a trustee or director is stranded overseas due to COVID-19, the ATO will not apply compliance resources to that aspect of the SMSF residency test
- temporary rent relief — the ATO will not take compliance action where an SMSF landlord (or a related non-geared company or unit trust) provides rental relief to a tenant in the form of a reduction, waiver or deferral on commercial terms due to COVID-19, and is properly documented. The ATO will also provide an in-house asset exemption for such rental deferrals by making a determination for 2021
- loan repayment relief — the ATO will not take compliance action where loan repayment relief is provided by an SMSF to a related or unrelated party due to COVID-19. The relief must be offered on commercial terms with the changes to the loan agreement properly documented
- limited recourse borrowing arrangements — if an SMSF has an LRBA in place with a related party, and the lender offers loan repayment relief to the SMSF, the ATO will accept the parties are dealing with each other at arm’s length, and the arrangement does not give rise to non-arm’s length income. The relief must be offered on commercial terms and
- in-house assets — if an SMSF exceeded the 5 per cent in-house asset threshold at 30 June 2021 due to COVID-19, a rectification plan must be prepared and implemented by 30 June 2022. However, the ATO will not undertake compliance activity if the rectification plan cannot be executed by 30 June 2022 because the market has not recovered or it is unnecessary to implement the plan as the market had recovered.