The SMSF Association (SMSFA) has highlighted the importance of specialist advice for self-managed super funds (SMSF) following the Government’s implementation of various COVID-19 SMSF relief measures.
The Australian Taxation Office (ATO) had extended residency, rental, loan repayment and in-house asset relief for SMSF’s to the 2021-22 financial year in September.
SMSFA chief executive, John Maroney, said: “The challenges of this pandemic have added another layer of complexity, so for SMSF members, especially those retired or approaching retirement, who are struggling with the COVID-induced changes, getting specialist advice is imperative”.
Maroney said rental relief was a serious consideration as it made up a significant part of many SMSF portfolios.
“The ATO decision confirms SMSF landlords can continue providing rental relief, with the caveat that any reduction, waiver, or deferral of rent is only temporary and appropriate,” he said.
“On the issue of residency requirements, many Australians are still stranded overseas due to travel restrictions and disrupted air travel, so the ATO’s decision to waive the application of compliance resources in 2021-22 will be welcomed by affected SMSFs.”
The relief allowed SMSFs to negotiate loan repayment adjustments for limited recourse borrowing arrangements.
Maroney said: “Breaches of the in-house asset rules will not attract compliance activity provided a written plan has been prepared to reduce the market value of those assets to below 5%.
“In addition, the 50% temporary reduction in the minimum drawdown requirements for account-based and market-linked pensions has been extended.”
Maroney urged SMSFs to seek specialist advice to assess the impact of COVID-19 on the fund and examine the fund’s eligibility for relief.
“Remember, too, the importance of having all the necessary documentary evidence to provide an auditor to support any relief claims made and to ensure there are no breaches of the ATO’s rules,” he said.