Issue | Guidance |
Access to super – compassionate ground – coronavirus | Temporary early release (access) is available to members who are adversely (economically) affected and satisfy the eligibility criteria (refer to ATO website). The maximum amount a member can access is up to $10,000 in 2019/20 and Applications are via MyGov and can be made from 20 April 2020. If eligible Before making the payment, care should be taken to ensure: § you are eligible to apply for the payment § the trust deed of the SMSF allows for withdrawals (as some trust deeds § the fund has sufficient liquidity to allow for the withdrawal and continued normal operation of the SMSF (as the legislation requires trustees to pay the amount to the member as soon as practicable), and § the fund’s investments continue to be consistent with the documented investment strategy which, in some cases, may need updating[1]. |
Pension payments | Every year trustees must ensure the minimum pension payment is met. Minimum pension payments for the current (2019/20) and next (2020/21) financial years As the minimum has been halved for 2019/20, it is possible to reduce pension payments for the remainder of the financial year. If a member has already met The new minimum pension payments for next financial year will be calculated Care should be taken to ensure the: § trust deed allows for a reduced minimum pension to be applied (noting that § pension commencement documentation allows reduced minimum § reduced minimum payments continue to meet the member’s ongoing |
Investment | The investment strategy of the fund must be reviewed regularly. Where the fund’s investments do not align with the investment strategy (for example, due to market downturn), action should be taken to either rebalance the asset allocation, or to amend the investment strategy where appropriate. Similar action may need to be taken in the event of market recovery. Consideration should be given to any impact |
Rental income | The ATO have confirmed that SMSFs can provide temporary relief to rental arrangements with tenants including those who are: § a related party or related trust, or § where a member, a relative of a member or related party/trust has an underlying economic interest in the tenant. This type of arrangement would ordinarily trigger a range of compliance breaches, however, the ATO has indicated it will not take compliance action for the 2019/20 Care should be taken to ensure: § concessions provided are documented along with supporting evidence § concessions are conducted on an ‘arms-length’ basis and are in the best § the fund has the ongoing ability to meet its obligations, including liabilities. |
In-house assets | In-house assets cannot exceed 5% of the fund’s total assets. Where in-house Where the in-house asset limit is breached on 30 June 2020 and the written plan § markets had not recovered, or § action was unnecessary due to market recovery rectifying the position. |
Estate planning / succession planning | In times of uncertainty and heightened risk of illness, it is more important than ever Broadly speaking, succession planning aims to ensure the right people: § gain control of the SMSF so that superannuation benefits are paid as § receive those benefits. Due to the complexity of these matters, trustees/members should seek legal advice |
Regulatory reporting & SMSF annual returns | The ATO has allowed accountants and auditors some leniency on lodgements of the SMSF annual return should COVID-19 affect their ability to lodge before the due date. An extension (for up to six weeks) should be requested prior to the due date. Where an extension is granted, this will also extend to Transfer Balance Account Reporting obligations where the fund reports transfer balance account events annually. Further information regarding this extension can be found on the ATO website. |
Residency Requirements | If the individual trustees or its directors of a corporate trustee are stranded overseas due to COVID-19, the ATO will not apply compliance resources to determine whether the SMSF meets the relevant residency conditions that would ordinarily apply. Further information regarding this issue can be found on the ATO website. |
Additional information | The ATO has provided a series of questions and answers for SMSF trustees. |
Next steps
To find out more about these are any other issues or concerns you may have, we recommend you contact us on 9562 0742.
[1] This may also be promoted due to the recent market movements.
Important information
This document has been prepared by GWM Adviser Services Limited (ABN 96 002 071 749, AFSL 230692) (GWMAS), part
of the National Australia Bank group of companies. Any advice provided is of a general nature only. It does not take into account your objectives, financial situation or needs. Please seek personal advice before making a decision about a financial product. Information in this document is current as at 8 April 2020. While care has been taken in its preparation, no liability is accepted by GWMAS or its related entities, agents or employees for any loss arising from reliance on this document. Any opinions expressed constitute our views as at 8 April 2020. Case studies are for illustration purposes only. Any tax information provided is a guide only. It is not a substitute for specialised tax advice.
GWM Adviser Services Limited (ABN 96 002 071 749, AFSL 230692) (‘GWMAS’). A member of the National Australia Bank Limited (‘NAB’) group of companies. NAB does not guarantee or otherwise accept any liability in respect of GWMAS or these services.