SMSF Early Release of Super
If a member of a fund wants to access the $10,000 early under the COVID-19 provisions, then there are a few additional steps that trustees need to undertake. The Trustees will need to ensure their Deed allows for early release, the member has satisfied the eligibility criteria for early release and ensure no funds are distributed until the release authority from the ATO has been received. The ATO have advised this will be an audit area on which they will be focussing.
COVID-19 and SMSF Tenant Rent Relief
Tenant rent that is below market value in a SMSF is normally a breach of the superannuation laws. If this rental relief is provided to a related party, then the situation can become trickier. The reason being, is the difference between the rent charged and the market value can amount to a loan and possibly put the fund in breach of the in-house asset rules.
However, the ATO has stated that for the 2019/2020 and 2020/2021 financial years it will not act where the rental relief is provided on arm’s-length terms. What this means is that if the relief is in line with the National Cabinet Mandatory Code of Conduct for commercial leasing principles, has a set period and the grounds for the relief is documented.
Relief for Related Party Loans
If your SMSF has a limited recourse borrowing arrangement with a related party, and it is provided with repayment relief, this would normally be a breach of the superannuation rules. The ATO will allow the relief if it is provided on similar terms to commercial banks.
A Decrease in Asset Values
If the assets held in your SMSF have decreased in value, you will need to consider if the current asset allocation is consistent with the fund’s investment strategy and the if the long-term goals of the SMSF will be able to be obtained.
Minimum Pension Payments
If your SMSF is drawing a pension, the drawdown rates for the 2019/2020 and 2020/2021 years have been halved.
| Age | Default Minimum Drawdown Rates | 2019/2020 & 2020/2021 Reduced Rates |
| Under 65 | 4% | 2% |
| 65-74 | 5% | 2.5% |
| 75-79 | 6% | 3% |
| 80-84 | 7% | 3.5% |
| 85-89 | 9% | 4.5% |
| 90-94 | 11% | 5.5% |
| 95 or more | 14% | 7% |
Interested in Finding Out More About Starting a Self-Managed Super Fund?
Feel free to contact us for an appointment to discuss self-managed super funds and how it might be the right fit for you.
