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Government announces plans to rectify NALE issues
The government intends to make legislative changes to ensure the non-arm’s length expense provisions operate as envisaged and will soon consult with industry.
In a statement released today, Senator Jane Hume has announced government and Treasury will consult with relevant industry stakeholders on the appropriate operation of the non-arm’s length income and expense provisions, particularly for APRA‑regulated superannuation funds.
The non-arm’s length expense provisions were designed to prevent superannuation funds from circumventing contributions caps, and artificially inflating fund earnings through non-commercial dealings, said Ms Hume.
“The Government understands that some industry stakeholders have concerns regarding the interpretation of these provisions by the Australian Tax Office in a recent Law Companion Ruling and the implications of this ruling for both APRA-regulated funds and SMSFs,” said Ms Hume.
“We have heard the concerns of the industry and will work to amend the law to make sure it operates as intended.”
The Government will ensure the legislative changes apply from 1 July 2022.
Further details of the consultation process will be provided to industry stakeholders as soon as practicable.
Ms Hume thanked all stakeholders that have engaged meaningfully on this issue so far.
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
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