Topics on self-managed superannuation fund – SMSF (3)

Understanding Non-Arm's Length Income (NALI) Provisions in Superannuation Funds

Background:

Before recent amendments, non-arm's length income (NALI) for complying superannuation funds, including SMSFs, was defined in Section 295-550. It encompassed various types of income, including:

1. Income from schemes where parties weren't dealing at arm's length and exceeded what would have been expected under arm's length dealings.
2. Dividends from private companies, unless consistent with arm's length dealings.
3. Trust income received by the fund as a beneficiary, except for income from fixed entitlements or distributions from discretionary trusts.

Key Points:

These rules remained intact after the recent amendments. However, the amendments clarified the application of NALI provisions when a complying superannuation fund incurs or doesn't incur certain losses, outgoings, or expenditures.

Expert Assistance:

For queries or assistance regarding NALI provisions and their implications for superannuation funds, reach out to Tax Ideas Accountants & Advisers at +61 2 83181545, or book an appointment through our live calendar.

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