News : NALI/NALE

Administration, Compliance, NALI/NALE

PCG 2016/5 not absolute for NALI

Safe harbour PCG 2016/5 NALI non-arm's-length income LRBA Limited recourse borrowing arrangement SMSF Self-managed superannuation ATO Paul Delahunty

Not satisfying the LRBA safe harbour rules defined in PCG 2016/5 will not necessarily trigger the non-arm’s-length income provisions.

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Compliance, NALI/NALE, Property

Use separate deals to avoid in-specie NALI

In-specie transfer Property NALI Non-arm's-length income SMSF Self-managed superannuation

SMSF trustees can steer clear of NALI with a simple adjustment when acquiring property via a part purchase and in-specie transfer transaction.

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NALI/NALE

Good NALE results from recent PBRs

Accurium Broderick FAAA ART SMSF Self-managed superannuation Accurium Mark Ellem NALE Trustee capacity

Accountants using their professional permits when performing work for their own fund without charge will not necessarily trigger the NALE provisions.

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NALI/NALE

Question NALE actions inside funds

SMSF Self-managed superannuation NALE non-arm’s length expenditure reasonable attempt Tony Negline Chartered Accountants Australia and New Zealand

SMSF trustees should be asked if any actions in relation to fund assets fall outside their trustee capacity as these will not be considered as a reasonable attempt to comply with the NALE rules.

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NALI/NALE, Tax

Scheme needed to trigger NALI

Non-arm's-length expenditure Non-arm's-length income NALE NALI Scheme Income Tax Assessment Act (ITAA)

In determining if an SMSF has a NALI or NALE issue, it must first be established if a scheme exists with the arrangement in question.

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NALI/NALE, Tax

NALI penalises all capital gains

Non-arm’s length income NALI Capital gains SMSF Self-managed superannuation IFPA Natasha Panagis

An example included in TD 2024/5 has shown how the NALI provisions can affect all SMSF capital gains realised in a particular income year.

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NALI/NALE

NALI capital gain offsets need care

Non-arm’s length expenditure NALE non-arm’s length income NALI Capital gains SMSF Self-managed superannuation Accurium Mark Ellem

SMSFs must exercise great care when they are looking to offset a capital gain on a NALI-tainted asset with a capital loss.

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Compliance, NALI/NALE, Trusts

Trust services could bring NALI scrutiny

Unit trusts NALI Non-arm's length income Related party

Contracting a related party to perform services on a unit trust with SMSF investors may expose the trustees to significant NALI risks.

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Compliance, NALI/NALE

NALI breaches remain unfixable

SMSF Self-managed superannuation NALI Non-arm's length income ATO

The ATO’s strict stance on NALI breaches leaves SMSF trustees with no way to rectify or fix honest mistakes without facing penalties.

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NALI/NALE, Tax

Capital losses can offset NALI liability

Non-arm's length income NALI Capital loss Capital gains tax TD 2024/5 SMSF Self-managed superannuation

Analysis of ATO guidance has identified how an SMSF could potentially use significant capital losses to reduce a NALI tax liability.

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