The ATO has announced that their compliance approach for the 2019-20 and 2020-21 financial years is that they “will not take action if an SMSF gives a tenant (even if a related party to the fund) a temporary rent reduction, waiver or deferral because of financial effects of COVID-19”.
SMSF trustees should note that the ATO’s announcement, published in the FAQ section of their website, is not in the form of a binding advice and there has been no formal change in the relevant requirements in the Superannuation Industry (Supervision) Act 1993 (Cth) (“the SIS Act”) or the Superannuation Industry (Supervision) Regulations 1994 (Cth) (“the SIS Regulations”) .
The following information/checklist has been prepared as a reference material for SMSF trustees and to highlight the importance of ensuring any rent relief is on arm’s length commercial terms in order to meet the key compliance requirements.
Among other things, ensuring temporary rent relief is on arm’s length commercial terms between the SMSF and the tenant is fundamental to superannuation compliance.
A practical checklist for SMSF trustees is provided below.
This information is provided to assist in deciding whether a formal opinion on the issue is required and cannot be relied upon as legal advice.
Further information is available here: Rent Relief SMSF Compliance Checklist (PDF)
Maria Siu
Special Counsel – Superannuation
SUPERCentral
Peter Townsend
Managing Director
SUPERCentral
(02) 8296-6266
peter@supercentral.com.au
www.supercentral.com.au