SMSFs and COVID-19 relief available in 2021-2022

SMSFs and COVID-19 relief available in 2021-2022

October 2021

Ordinarily, managing an SMSF to ensure it doesn’t breach any of the rules is complex. Add the uncertainty created by a global pandemic and it’s never been more important to understand what relief, if any, your fund may qualify for in 2021-22 and what evidence your auditor will need to see to ensure that no contravention is reported to the ATO.

Given the ongoing effects of COVID-19, the ATO recently confirmed that it would extend some of the relief measures that were previously granted for the 2019-20 and 2020-21 financial years. The types of relief that have been extended to the 2021-22 financial year for SMSFs, are outlined below and are particularly important when dealing with transactions that involve related parties.

These measures include:

  1. Rental relief
  2. Loan repayment relief
  3. In-house asset relief
  4. Minimum pension drawdowns – 50% reduction
  5. SMSF residency relief

 

1. Rental relief

If your SMSF owns a property and has a tenant in financial distress due to COVID-19, the ATO has extended its relief to allow SMSF landlords to continue to provide rent relief in 2021-22.

The ATO has confirmed that they will not take action where an SMSF gives a tenant – who may also be a related party – rent relief, provided that any reduction, waiver, or deferral of rent is only temporary and appropriate, given the pandemic.

As trustee, this means you will need to:

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Disclaimer: The information contained in this document is provided for educational purposes only, is general in nature and is prepared without taking into account particular objective, financial circumstances, legal and tax issues and needs. The information provided in this article is not a substitute for legal, tax and financial product advice. Before making any decision based on this information, you should assess its relevance to your individual circumstances. While the SMSF Association believes that the information provided in this article is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk. The information provided in this bulletin is not considered financial product advice for the purposes of the Corporations Act 2001.