“The ATO recognises that trustees of complying superannuation funds may not have realised that the proposed amendments will apply to non-arm’s length expenses of a general nature that has a sufficient nexus to all ordinary and/or statutory income derived by the fund in an income year.

“It is expected that trustees of a complying superannuation fund that have incurred non-arm’s length income of a general nature that has sufficient nexus with all ordinary and/or statutory income derived by the fund will alter their arrangements in order to ensure the proposed amendments will not apply to their fund after the expiry of the ATO’s transitional compliance approach.”

The news comes following the office’s clarification that financial services professionals who provide services in a business capacity to their own SMSF for less than market rates could see all the fund’s income attract the top marginal rate of tax.

However, if services such as accounting are provided by the trustee in a personal capacity, the SMSF’s income will not be treated as NALI.

Commenting on the new guidelines, SuperConcepts general manager of technical services and education Peter Burgess said the application of the new NALI rules — which recently passed Parliament along with a range of other changes to super — to general fund expenses had taken practitioners by surprise.

“The explanatory materials that were released with this legislation said there must be a sufficient nexus between the non-arm’s length expense and the income; that is, the expenditure must have been incurred in gaining or producing the relevant income,” Mr Burgess said.

“It does seem somewhat heavy-handed to require an SMSF to pay many thousands of dollars in extra tax just because they didn’t incur a bill for the accounting services provided by their accounting firm.”

Mr Burgess added that the distinction between services provided to an SMSF in a personal or business capacity was too open to interpretation and required further clarification from the ATO.

“Perhaps the way forward is to firstly make clear that transactions with unrelated parties are excluded from these provisions — that will deal with any suggestion that staff discounts provided by a firm to their employees, for example, discounted accounting or admin fees, may have a knock-on effect from their SMSF,” he said.

“Secondly, define what we mean by a trustee service or duty, and then any service which constitutes a trustee service or duty should be carved out regardless of who provides this service to the fund and regardless of whether a fee has been charged.”