The Tax Institute has put forward revised NALE rules that remove the tax slug for super funds but still tackle non-arm’s-length arrangements.

The government must step in and take action on the application of the NALE rules to ensure they do not create negative unintended consequences.

Trustees and their advisers cannot automatically assume transactions involving NALE will be detected by an SMSF auditor.

Detecting non-arm’s-length expenditure situations may not be straightforward, regardless of examples provided in Law Companion Guide 2021/2.

Identifying and acting upon NALE issues may not be straightforward and the assumption cannot be made the SMSF audit will be the solution.

The non-arm’s-length expenditure rules as defined by LCR 2021/2 are not confined exclusively to related-party transactions.