SMSF Association Media Note
The Federal Budget, the second for 2022 and the first by the Albanese Labour Government, has delivered certainty for the SMSF sector.
Three-year SMSF audits policy cancelled:
In the 2018-19 Budget, it was proposed to introduce a three-year audit cycle for SMSFs that met prescribed criteria. It was a controversial measure that contained a range of complexities and concerns for the sector. The annual audit process plays a pivotal role in maintaining the integrity of the sector. “Although this measure failed to progress beyond the Budget pronouncement, it is pleasing to see that it has officially been axed.”
Relaxing of SMSF residency deferred:
The Government will defer the start date for the proposed relaxing of the residency requirements for SMSFs announced in the 2021-22 Budget. These measures will now start on or after the legislation becomes law. They were scheduled to start from 1 July 2022. The SMSF Association has actively engaged with the Government on this issue. “Although the delay is disappointing, it is pleasing to see that the issue remains on the Government’s policy agenda.”
Budget silent on Non-arm’s length income (NALI) / Non-arm’s length expenditure (NALE) and legacy pensions:
Two issues of importance to the SMSF sector, NALI and legacy pensions, were not mentioned in the Budget papers. With legacy pensions, an amnesty period to allow SMSF members stuck in legacy pensions to convert to more conventional style pension products
would be a significant reform. The NALI/NALE rules, which took effect on 1 July 2018, could have far-reaching and unjustifiable consequences for all superannuation funds, including SMSFs, and we have long advocated the need for reform.
We will continue to engage with Government and Treasury on these two important issues.