03 August 2021 - The ATO NALI Drama Explained

By now you would have seen all the dramatic headlines regarding the ATO incursion into general expenses in a SMSF where any discounted services or even free services delivered under an arrangement by, even the trustee, may see ALL income of a SMSF in a year being taxed at 45%. The ATO newly published legal companion - LCR 2021/2 is detailed and will create multiple problems for many accountants, planners administrators, lawyers and SMSF trustees. A lawyer doing their own BDBN could find all the fund's income for the year being NALI income! Now that will come as a shock for many.

Plus the sting in the tail is that many APRA funds are going to be in the firing line for their investments - raising NALI on capital gains.

The good news is that we have a few months to put in place plans and measures to counter the ATO legal guidelines and until then we must abide by the law and also Practical Compliance Guideline PCG 2020/5 Applying the non-arm's length income provisions to 'non arm's length expenditure' - ATO compliance approach for complying superannuation entities.

In this special session Grant Abbott, SMSF author and trainer will do a deep dive into the law - the current status and the new guidelines for all of us to prepare for. Plus we will go through five case studies under the new and old rules. 

Explanatory-Memorandum-NALI-1

NALI and general expenses

3 August NALI - the ins and outs

Supertax