In the current environment with community debate on the level of tax concessions for superannuation and large SMSF balances, there is increased focus on non-arm’s length transactions that bolster SMSF assets. The ATO has a new weapon in its armoury, whereby expenditure incurred by a super fund under a non-arm’s length arrangement can trigger the NALI provisions. Even a minor breach currently has the potential to subject an SMSF to the highest marginal tax rate. This session drills down on how the NALI rules now apply in practice, including:

• How the NALI rules can have application to services provided by:
  • trustees
  • accountants and fund administrators
  • financial advisers
• How a minor breach could subject a fund’s income, including capital gains, to the top marginal tax rate, even if in pension mode, and the proposed legislative changes to address this
• Can a breach for an under market value expenditure transaction be rectified by accounting for an in specie contribution journal entry?
• The challenges for SMSFs participating in start-up entities involving members
• How the market value substitution rules will apply
• What is the ATO’s compliance approach?
• Practical examples, including two unrelated SMSFs equally owning units in a unit trust with related party lending on non-commercial terms – what is the NALI effect?