News : NALI/NALE

Insurance, NALI/NALE

Specific NALE may apply to insurance

Life insurance premiums paid by an SMSF for a particular member may be considered specific NALE given they are not costs related to the general operation of the fund.

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NALI/NALE

Trustee capacity consideration tweaked

The application of the trustee capacity rules within the ATO’s revised NALI arrangements appears to be less rigid, but responsibility for compliance has not changed.

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LRBA, NALI/NALE

Revised LCR maintains stance on LRBAs

Self-managed superannuation SMSF Law Companion Ruling LCR 2021/2DC NALE non-arm’s-length expenditure LRBA limited recourse borrowing arrangement DBA Lawyers Fraser Stead

The changes to the operation of the NALE rules have not flowed through to LRBAs, with the ATO’s revised guidance seeing non-arm’s-length dealings as tainting the arrangement forever.

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NALI/NALE

In-specie contribution changes hide NALI trap

New draft guidance on the use of in-specie assets as a contribution hinges on the valuations applied as any incorrect figures may create NALI problems.

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NALI/NALE

NALE gap requires transaction examination

A regulatory gap around the treatment of NALE for general expenses means trustees should be closely examining how they acted for their fund in the past financial year.

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Contributions, NALI/NALE

How a contribution can trigger NALI

Practitioners must ensure clients adopt a new approach to SMSF asset acquisitions involving an in-specie transfer component for compliance purposes.

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NALI/NALE

No SIS edict on NALI tax allocation

SMSF trustees cannot rely on the SIS Regulations to determine whether a NALI liability has to be allocated to a particular superannuation interest.

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NALI/NALE

Revised NALE LCR released for comment

A revised version of LCR 2021/2 incorporating the NALE rules that become law at the start of the financial year has been released for comment.

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Administration, Compliance, NALI/NALE, SMSF

Stand-alone corporate trustee reduces risks

SMSF Self-managed superannuation Corporate trustee NALE Non-arm's-length expenditure Taxation Ruling 2010/1 Dan Butler DBA Lawyers

Using a corporate trustee for multiple purposes could expose an SMSF to compliance risks, particularly given the uncertainty surrounding the treatment of NALE.

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Auditing, LRBA, NALI/NALE

Non-commercial LRBAs too risky for auditors

Related-party NALI non-arm's length income LRBA Limited recourse borrowing arrangement Auditor

Related-party LRBAs without evidence proving they are on commercial terms are unlikely to receive approval from SMSF auditors due to NALI risk.

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