Part A qualification
Instructions for Section A: SMSF auditor Part A have been updated to help clarify the requirements for the fund. This question can also now be answered as 'No' if the audit report was qualified only in relation to insufficient audit evidence under Auditing Standard ASA 510 Initial Audit Engagements – Opening Balance.
Property count
A new label J7 Property Count has been added to Section H: Assets and liabilities at 15b. If your SMSF holds investments in real property that was held in trust as a security under a limited recourse borrowing arrangement, this information must be reported at J7 Property count.
G1 Death benefit increase
Label G1 Death benefit increase at Section C: Deductions and non-deductible expenses has been removed.
If a fund member died on or before 30 June 2017, the fund must have paid the benefit before 1 July 2019 to be eligible to claim a deduction.
From 1 July 2019, the deduction is no longer available.
Non-arm’s length income (NALI)
On 2 October 2019, the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2019 that amends section 295-550 of the Income Tax Assessment Act 1997 (dealing with NALI), was given royal assent.
From 1 July 2018, NALI was expanded to also include income derived by an SMSF from a scheme in which the parties were not dealing with each at arm's length where the fund incurred expenses in deriving the income that are less than, including nil expenses, those which the SMSF would otherwise have been expected to incur if the parties were dealing on an arm's length basis.
The expenses may be of a revenue or capital nature in the same way that NALI may be statutory or ordinary income.
From 1 July 2018, income derived by an SMSF in the capacity of beneficiary of a trust through holding a fixed entitlement to the income of the trust will be NALI where:
- the SMSF acquired the entitlement under a scheme or the income was derived under a scheme in which parties weren't dealing with each other at arm's length, and
- the SMSF incurred expenses in acquiring the entitlement or deriving the income that are less than, including nil expenses, what the SMSF would otherwise have been expected to incur if the parties were dealing on an arm's length basis.
- Note: The ATO has a transitional compliance approach for the 2018–19; 2019–20 and 2020-21 income years in respect of non-arm's length expenditure (described in paragraphs 9 to 12 of draft Law Companion Ruling LCR 2019/D3) of a general nature that has a sufficient nexus to all ordinary and/or statutory income derived by the fund in those respective income years (for example, non-arm's length expenditure on accounting services).
For more information, on these recent amendments and the transitional compliance approach, see Non-arm's length income.