Understanding NALI Provisions in Superannuation Funds
The Non-Arm's Length Income (NALI) provisions are important to consider when managing a superannuation fund. These provisions ensure fair dealings between parties involved in the fund.
If parties within a scheme are not dealing at arm’s length, the NALI provisions come into play. However, when it comes to internal operations of a superannuation fund—like trustee duties performed internally—the NALI provisions don't apply. This is because these internal functions don't involve dealings with external parties.
For example, if a trustee of a Self-Managed Super Fund (SMSF) does bookkeeping as part of their duties without charging a fee, it's considered an internal arrangement and isn't subject to the NALI provisions.
On the other hand, if a trustee engages in activities outside their trustee duties or outsources functions to third parties—like managing a real estate portfolio or hiring a real estate agent—the NALI provisions could apply if these activities aren't conducted at arm’s length.
For questions, reach out to Tax Ideas Accountants & Advisers at +61 2 83181545 or book an appointment with our live calendar.