Sladen Snippet - Treasury releases proposed NALE changes
Treasury has release proposed legislative changes to the non-arm’s length expences (NALE) rules. While they are not as bad as the initial proposal to take NALE at a rate of 225%, they are still not ideal.
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Sladen Snippet – ATO confirms NALE practical administration approach is extended to 30 June 2023
The ATO has confirmed that its current administrative approach to the non-arm’s length expenditure (NALE), as set out in Practical Compliance Guide PCG 2020/5, will be extended to 30 June 2023.
ATO partially softens its view on non-arm’s length expenditure
After seeking advice from an independent advice panel, the ATO has released its finalised Law Companion Ruling setting out the ATO view on the non-arm’s length expenditure (NALE) amendments to section 295-550 of the Income Tax Assessment Act 1997 (ITAA97), LCR 2021/2. In addition, the ATO has amended its contribution tax ruling TR 2010/1. The final LCR and amendments to TR 2010/1 partially soften the ATO views on the application of NALE.
Sladen snippet - ATO extends transitional compliance approach to NALE for another financial year
As previously discussed here, the definition of non-arm’s length income (NALI) under the Income Tax Assessment Act 1997 was amended in mid-2018 to include non-arm’s length expenses or NALE. NALE includes not just an expenditure, but also a loss or outgoing that is lower than an arm’s length amount, and also includes where there is a nil amount (ie, no expenditure).
ATO provides clarity on obligations of SMSF auditors in respect of NALE and NALI
The ATO has provided some welcome clarification for auditors regarding their obligations to report on non-arm’s length expenditure (NALE) incurred by a super fund of a general nature.