COVID-related support for SMSFs

Due to COVID-19, trustees of an SMSF, or a related party of the fund, may provide or accept certain types of relief, which may give rise to contraventions of the super laws. You may also have been stranded overseas because of travel bans, which can affect your fund's residency status. In recognition of these issues, the ATO is offering support and relief to SMSF trustees for the 2019–20, 2020–21, and 2021–22 income years.

Rental relief

Your fund, or a related party of your fund, may have offered rental relief to a tenant due to the financial impacts of COVID-19:

if rent was reduced or waived, the ATO will not take any compliance action as long as the relief is provided on comparable terms to relief offered by other landlords to unrelated tenants in similar circumstances; and
if rent was deferred, relief granted by the ATO will ensure that the deferral does not cause a loan or investment to be an in-house asset of the fund in 2019-20, 2020-21, or 2021-22, and future financial years, provided certain conditions are met.

Temporary changes to a lease agreement to provide for rental relief need to be properly documented, together with the reasons for those changes.

In-house asset relief

If the value of your fund's in-house assets exceeds 5% of the fund’s total assets as of 30 June of an income year, you must prepare and execute a written plan to get below 5% by the end of the following income year.

However, if you have not been able to execute the plan because of the financial impacts of COVID-19 the ATO will not take any compliance action against your fund.

Loan repayment relief

If your fund has offered loan repayment relief because the borrower was experiencing difficulty repaying the loan due to COVID-19, the ATO will not take any compliance action provided:

the relief is offered on commercial terms; and
the changes to the loan agreement are properly documented.

Other relief

SMSF residency relief – may be available where your fund no longer satisfies the residency rules because you were stranded overseas for an extended period.

Loan repayment relief – may be available in your fund offered loan repayment relief because the borrower was experiencing difficulty repaying the loan due to the financial impacts of COVID-19.

LRBA relief – may be available if your SMSF has a limited recourse borrowing arrangement (LRBA) in place with a related party lender and the lender has offered loan repayment relief to the fund due to the financial impacts of COVID-19.