The ATO has today announced that it will take no action where a self-managed superannuation fund (SMSF) reduces the rent to a related party due to Covid-19.  This has come as a relief to many SMSF trustees who are concerned about the rent their business pays to their SMSF.

As always, we recommend that you document any change in rent and the reasons why in the form of a minute to be signed by both:

• - The Landlord: the SMSF trustee company directors or individual trustees (if there is no Corporate trustee); and
• - The Tenant: of the business premises i.e. the business and once again the company directors or if owned in a different structure the proprietors.
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Whilst this ATO update is aimed at SMSF landlords, we can safely assume the ATO will take the same view with the landlords in other entities also renting commercial property to related parties.

The minute or resolution to record the updated rental terms should also refer to the terms contained in the lease contract. If there is no lease in place between your landlord entity and the business then we strongly urge you to get one in place, contact us for a quick and cost-effective lease provided by a legal service we subscribe to.  Just email us on corpsec@primarius.net.au