Show download pdf controls
  • COVID-19 relief in ACR Addendum extended to 2021-22 financial year

    Due to the ongoing financial effects of COVID-19, we understand that trustees of self-managed super funds (SMSFs) are still finding themselves in a position where they (or a related party) are having to provide or accept certain types of relief, which may give rise to contraventions under the super laws.

    In recognition of this, we have extended the following types of relief, as set out in the Addendum to the Auditor/actuary contravention report (ACR) instructions to cover the 2021–22 financial year:

    • rental relief (including rental reduction, waiver and deferral relief)
    • loan repayment relief, including for limited recourse borrowing arrangements
    • in-house asset relief.

    The Addendum to the ACR instructions, which already applies to the 2019-20 and 2020-21 financial years, has been updated to confirm this position.

    Approved SMSF auditors need to refer to the Addendum when determining whether a contravention arises because of the relief, when to report a contravention to us via an ACR for the 2021–22 financial year and what evidence to obtain from the trustees to support the relief. In summary, SMSF auditors need to check that:

    • rental relief is offered on commercial terms due to the financial impacts of COVID-19 (having regard to relevant State and Territory COVID-19 support measures) and the arrangement is appropriately documented
    • loan repayment relief is offered on commercial terms due to the financial impacts of COVID-19 (having regard to the terms of relief offered by commercial lenders), and the changes to the loan agreement are properly documented
    • funds that exceeded the 5% in-house asset threshold at 30 June 2021 due to the financial impacts of COVID-19 have prepared a written plan to reduce the market value of the fund's in-house assets to below 5% by the end of the 2021-22 financial year (even though will not take any compliance action for the breach).

    We plan to make a similar determination to Self-Managed Superannuation Funds (COVID-19 Rental income deferrals - In house Asset Exclusion) Determination 2020 for the 2021–22 financial year to ensure that a rental deferral offered by the fund or a related party does not cause a loan or investment to be an in-house asset in the current and future financial years. In the interim we will adopt the compliance approach set out in the Addendum.

    SMSF auditors need to use their professional judgment when determining whether relief is offered on commercial terms due to the financial effects of COVID-19.

    If there is insufficient appropriate evidence to support the relief, including that it is offered on commercial terms, SMSF auditors should report this to us via an ACR where the reporting criteria is met.

    We have also published an article for SMSF trustees to advise them we have extended the COVID-19 relief offered to the 2021–22 financial year.

    See also:

    Keep up to date:

      Last modified: 23 Sep 2021QC 66860