National Conference 2022
SMSF Association
Non-arm’s length income (NALI) has been a hot topic of discussion and debate in the SMSF industry in recent years, in particular since the ATO first released their draft ruling on non-arm’s length expenditure (NALE) in 2018 (and its subsequent iterations).
NALI is one of the strongest tax penalties currently available to the ATO. While income of an SMSF is typically taxed at 15% (or 0% for assets supporting a retirement phase income stream), NALI is taxed at the highest marginal rate – currently 45%. It’s therefore unsurprising that any developments in the law or administration of the NALI provisions attracts widespread attention.
In this paper, we will cover:
The NALE/NALI rules;
The ATO’s view set out in LCR 2021/2;
How to “swim between the flags” for related party dealings; and
Where to from here?
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