RESIDENCY RELIEF
During the 2020, 2021 and 2022 income years, if trustees of SMSFs were stuck overseas this could have had an impact on whether the fund met the conditions to be an Australian super fund. In particular, being overseas for an extended period may have affected whether the central management and control of the fund was ordinarily in Australia or whether fund satisfied the 'active member' test.
The ATO has indicated that provided there were no other changes in relation to the residency conditions it will not take any compliance action to determine whether the fund meets the residency test in those years.
RENTAL RELIEF
A range of rental relief could be provided to tenants by SMSFs or their related parties during the 2020 to 2022 income years, often under specific State government programs. This could include rental waivers or deferrals, which would ordinarily cause issues with respect to certain superannuation provisions such as the sole purpose test. For those income years the ATO indicates that it not be undertaking compliance action where:
- The relief is on commercial terms, that is, it is provided on comparable terms to relief offered by other landlords to unrelated tenants in similar circumstances (having regard to the State and Territory COVID-19 support measures);
- The relief is offered due to the financial impacts of COVID-19; and
- You have properly documented the arrangement.
IN-HOUSE ASSET RELIEF
The downturn in the market due to COVID-19 may have caused a SMSFs assets to drop in value resulting in the value of a fund's in-house assets exceeding the 5% threshold. In that case, the super laws ordinarily require trustees to prepare and execute a written plan to reduce the market value ratio of the fund's in-house assets to below 5% by the end of the following income year. However, as the ongoing impacts of COVID-19 may have made this difficult, the ATO indicated that for 2020 – 2022 it will not take any compliance action against the fund, and that SMSF auditors will not need to report any contravention of the in-house asset rules to the ATO.
LOAN REPAYMENT RELIEF
In some cases, trustees may have provided loan repayment relief to related or unrelated parties. If the loan repayment relief was provided due to the financial impacts of COVID-19, the relief is offered on commercial terms and the changes to the loan agreement are properly documented, the ATO indicated that for 2020 – 2022 it will not take any compliance action against the fund, and that SMSF auditors will not need to report any contravention of the super laws to them.
As these relief measures are no longer applicable for 2023, SMSF trustees will need to ensure that funds comply with the superannuation laws as they ordinarily apply.