ATO final ruling on NALI and NALE

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Description

 After three years since the draft ruling, the ATO has issued their final ruling (LCR 2021/2) in relation to how the non-arm’s length income (NALI) and non-arm’s length expenditure (NALE) provisions apply to superannuation funds.

This ruling has significant implications for SMSF trustee clients as an innocent or inadvertent acquisition of anything for less than market value (including acquisitions for no cost) could increase the SMSF’s tax rate to 45% on some or all of the fund’s income.

In this webinar, we explain the ATO’s final position, including:

  • An overview of the non-arm’s length income provisions
  • When the NALI and NALE rules apply to SMSFs
  • How non-arm’s length general and specific expenses are treated
  • The difference between services provided by a trustee/director and a member/individual
  • The interplay between the NALI/NALE rules and superannuation contributions, trust structures and the CGT market value substitution rules
  • Tips on how to avoid breaching the NALI and NALE rules

 

Recorded on 12 August 2021
Presented by Natasha Panagis
1 CPD point