COVID-19 relief and support provided to financially impacted SMSFs has ended and trustees must ensure they document any relief they accessed or provided during the 2022 financial year.
The Australian Taxation Office (ATO) has issued a statement reminding trustees of self-managed superannuation funds (SMSFs), along with SMSF auditors, that the COVID-19 relief and support provided to financially impacted SMSFs ended on 30 June 2022.
COVID-19 contraventions under the super law
During the 2020, 2021 and 2022 financial years, the ATO acknowledged there were several SMSFs severely impacted by COVID-19, particularly in those states that experienced lengthy lockdowns and high case numbers. Some SMSF trustees found themselves in a situation where they, or a related party of their fund, were providing or accepting certain types of relief, resulting in contraventions under the super law. Examples of these contraventions include the underpayment of rental income and missed loan repayments. To alleviate this issue, the ATO offered rental, loan repayment and in-house asset relief.
The ATO also recognised there would be SMSF members who found themselves stuck overseas for a longer period than planned due to travel restrictions and border closures imposed around the world. This may have affected the residency status of their SMSF and, as such, residency relief was also offered.
ATO has reminded SMSF trustees of their obligations
With the conclusion of this COVID-19 support, the ATO has very clearly set out their expectations for both trustees and auditors going forward. Trustees are expected to comply with all obligations under the income tax and super laws and auditors must report any contraventions of these laws to the ATO in an Auditor Contravention Report (where applicable).
The ATO also took the opportunity to remind trustees they must ensure they document any relief they accessed or provided during the 2022 financial year and provide their SMSF auditor with supporting evidence for the purposes of the annual SMSF audit.
If you are aware that your SMSF will be in contravention of these laws going forward, speak with your BDO adviser about submitting a voluntary disclosure to the ATO. If a voluntary disclosure is submitted before the ATO initiate an audit, this may be considered when they determine if further action is required. Your BDO adviser is also able to assist with the implementation of a plan to rectify the contravention.
For more information, please contact your local Superannuation adviser.
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