In its announcement, the ATO promised to release further information to assist trustees and professional advisers in making decisions about their arrangements.

Speaking to SMSF Adviser, an ATO spokesperson said it is in the process of producing “illustrative examples” set for release in September this year.

“One area of focus of the further information and ‘illustrative examples’ that we intend to provide is about the circumstances in which we consider the NALI provisions apply to a non-arm’s length LRBA because it results in an SMSF receiving a greater amount of or ordinary or statutory income in comparison to the amount that would have been received if the parties were dealing with each other at arm’s length,” the spokesperson said.

“We are also in the process of reviewing particular scenarios raised by SMSF trustees and advisers to determine whether information and examples in relation to other aspects of the application of the NALI provisions (in the context of LRBAs) may also assist SMSF trustees and advisers,” the spokesperson added.