The ATO has announced an extension to the COVID-19 relief initiatives for SMSF trustees.
Due to continuing impacts of the COVID 19 pandemic in the 2021/22 financial year, the ATO provided guidance and assurances to SMSF trustees as to how they would respond to potential breaches of legislation stemming from the pandemic and subsequent Government responses to it.
Extensions apply to the following areas of relief;
- Rent relief provided by SMSF trustees to tenants
- Loan relief provided to SMSFs from related parties
- Breaches of in-house asset limits resulting from market movements associated with the economic impact of the pandemic
- Concerns with Trustees being stranded overseas and exceeding the two year ‘temporary absence’ provisions
Nobody could have envisaged how long the pandemic would last and these relief measures were originally designed to cover the 2019/2020 and 2020/2021 financial years only.
In response to the various ongoing lockdowns and travel restrictions, the ATO have recently announced that the relief measures will be extended to cover the 2021/2022 financial year. Further information can be found on the ATO’s website here.
This will be welcome relief for many SMSF trustees. It is important to understand, however, that this is not a free kick from trustees. Any relief measures involving SMSFs must be on commercial terms, justifiable and documented. As with the prior years, you can expect that you will need to supply evidence and justification of any relief measures to your SMSF auditor.