Superannuation and COVID-19: SMSFs can reduce rent payable to related tenants

SuperannuationCommercial Leasing
Written By Rod Payne

The ATO has confirmed that it will not take compliance action against SMSFs that give a related party tenant a temporary reduction in rent during the 2019/20 and 2020/21 years.

This is a sensible approach that alleviates the need to show evidence that market value rent has reduced or altering the lease to reduce rent is an arm’s length dealing. The ATO does not state by how much rent can be reduced, therefore, we suggest SMSF trustees record their reasonings. The reduction should also be recorded in a legal document (eg deed or exchange of letters etc).

For queries or further information please contact:

Rod Payne
Principal
T: 03 5226 8541
E: rpayne@ha.legal

Alasdair Woodford
Senior Associate
T: 03 5225 5217
E: awoodford@ha.legal

Rod Payne http://www.harwoodandrews.com.au/rod-payne
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