The SMSF Association has questioned whether the recent High Court decision handed down in Commissioner of Taxation v Bendel [2026] HCA 18 will trigger any amendments to an ATO instrument released for the sector.
The High Court ruled in the Bendel case an unpaid present entitlement (UPE) owed by a trust to a private company beneficiary is not, of itself, a loan with regard to Division 7A of the Income Tax Assessment Act.
The industry body recognised this decision is not about trust distributions to SMSFs, but noted it could have a flow-on effect should the ATO choose to revise Self Managed Super Funds Ruling (SMSFR) 2009/3 “Self Managed Superannuation Funds: application of the Superannuation Industry (Supervision) Act 1993 to unpaid trust distributions payable to a Self Managed Superannuation Fund”.
“While Bendel is a Division 7A case, its reasoning may have important implications for SMSFs with the ATO historically taking a similar approach to unpaid trust distributions owing to SMSFs [under SMSFR 2009/3],” the SMSF Association said in a member newsletter.
“In SMSFR 2009/3, the ATO’s view is that an unpaid trust distribution may, depending on the circumstances, constitute financial accommodation or a loan for Superannuation Industry (Supervision) Act purposes. Where the trust is a related party of the SMSF, this can give rise to in-house asset issues as well as non-arm’s-length, sole purpose and non-arm’s-length income concerns.
“The High Court’s rejection of the proposition that mere non-payment of a UPE amounts to financial accommodation may place pressure on certain aspects of the ATO’s existing position with respect to SMSFs.”
However, given the uncertainty over the direction the regulator will take with reference to SMSFR 2009/3, the association has recommended practitioners take a conservative approach toward UPEs, especially when they involve related unit trusts.
The professional body also acknowledged the ATO is seeking feedback on its impact statement pertaining to the Bendel case and has issued a 24 July 2026 deadline for these submissions.
To this end, it has invited members to share their thoughts on the decision and has committed to engaging with the ATO during the consultation process.
Darin Tyson-Chan
Editor
Darin is the founder and publisher of Benchmark Media, an independent publishing house whose mastheads include financialobserver, selfmanagedsuper and smstrusteenews. He has been covering the financial services space for over a decade and in this time he has worked for a variety of trade publications. Darin has also written for the Money section published in The Sydney Morning Herald and The Age.
Articles by Darin