Previously there was some uncertainty as to whether an accountant undertaking their own accounts for their own SMSF would be considered to be NALI given this meant they were saving money on accounting costs, he explained.

The explanatory memorandum materials, however, confirm that the non-arm’s length income rules do not apply “in respect of superannuation entity’s arrangements that are purely internal”.

“This is because an entity’s internal functions are not undertaken with another party on any terms, non-arm’s length or otherwise,” the explanatory memorandum states.

The materials also provide an example of an SMSF trustee undertaking bookkeeping activities for no charge in performing their trustee duties.

“Such internal arrangements are outside of the scope of the non-arm’s length income rules as they do not constitute a scheme between parties dealing with one another on a non‑arm’s length basis, the EM states.

Mr Butler said this clarification in the EM is a “welcome surprise” and clarifies that Treasury does not consider this activity to be an NALI risk.

“It provides some comfort for practitioners who previously considered that too uncertain or uncharted waters,” he said.

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