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ATO releases draft determination on in-house asset exclusion

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Miranda Brownlee
05 August 2020 — 1 minute read

The ATO has released a draft legislative instrument which will provide greater certainty on the in-house asset exclusion for SMSFs that have offered rent deferrals to related parties.

The ATO this week has published Self-Managed Superannuation Funds (COVID-19 Rental Income Deferrals – In-house Asset Exclusion) Determination 2020, which applies to SMSFs that have acquired an in-house asset from a deferral of rental income under a lease (on arm’s-length terms).

In a public update, the ATO explained that following the financial impacts of COVID-19, some SMSF trustees have needed to provide rental relief in the form of deferrals to a related-party tenant.


SMSFs invested in regulation 13.22B and 13.22C entities have also needed to provide rental deferrals to tenants in some cases, the ATO said.

“Since a rental deferral amounts to a loan under the super laws, this can cause the SMSF to directly acquire an in-house asset or cause its investment in the regulation 13.22 entity to become an in-house asset as a result of the loan triggering an event in regulation 13.22D,” the Tax Office explained.

“Ordinarily, this would mean the fund would need to dispose of the in-house asset before the next financial year where it exceeds the 5 per cent threshold.”

In order to avoid these two types of in-house asset consequences from arising, the ATO said it plans to make a determination under paragraph 71(1)(f) of the Superannuation Industry (Supervision) Act 1993 by way of a legislative instrument (LI).

“The LI will exclude the asset from being an in-house asset where the rental deferral has been offered on arm’s-length terms to the tenant under a lease during the 2020 and 2021 financial years due to the impact of COVID–19,” it stated.

The instrument will commence the day after it is registered on the Federal Register of Legislation.

The draft LI is now available for public consultation until 31 August 2020.

Miranda Brownlee

Miranda Brownlee


Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years. 

Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on: This email address is being protected from spambots. You need JavaScript enabled to view it.

ATO releases draft determination on in-house asset exclusion
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