The Australian Taxation Office (ATO) has recently provided advice to remind the SMSF industry that the COVID-19 relief and support that was offered to SMSFs financially over the past few years ended on 30 June 2022.
For the 2019–20, 2020–21 and 2021–22 income years the Commissioner had offered to SMSFs:
- residency relief
- rental relief (including rental reduction, waiver and deferral relief)
- loan repayment relief, including for limited recourse borrowing arrangements (LRBAs)
- in-house asset (IHA) relief
This support was offered in recognition of the significant financial impact COVID-19 had on SMSFs, particularly in some States or Territories that were subject to re-occurring and prolonged lockdown periods.
Numerous situations arose throughout this period where:
- trustees found themselves in a position where they, or a related party of the fund, were providing or accepting certain types of relief which resulted in contraventions under the super law, or
- many countries also imposed travel bans and restrictions which resulted in SMSF trustees being stranded overseas, which may have affected the fund’s residency status.
With the COVID-19 support now ending by the Regulator, the ATO has advised for the 2022–23 income year and later years:
- they expect trustees to now comply with their obligations under the income tax and super laws previously covered by the relief
- approved SMSF auditors must report contraventions to us via the Auditor/actuary contravention report (ACR) where the reporting criteria is met.
If contraventions occur, trustees should use the voluntary disclosure service and make a plan to rectify the contravention as soon as possible – the ATO take any voluntary disclosures into account when determining what actions we will take with SIS compliance breaches.
For the 2021–22 income year, it is important that trustees ensure that they document any relief that has been accessed, and can provide evidence to their approved SMSF auditor to support it for the purposes of the annual SMSF audit. When conducting the compliance audit, auditors should refer to the Addendum to the ACR Instructions to determine when to report contraventions to us and what evidence to obtain from the trustees.
You can refer to the ATO website for further information about the previous COVID-19 relief for SMSFs and their announcement on the cessation of the relief for the 2022-23 year and subsequent years.