This article focuses on when a non-arm’s length general expense (General NALE) in a self managed superannuation fund (SMSF) will give rise to a non-arm’s length income (NALI). This Part 3 examines General NALE found in subsections 295-550(8) and (9) of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997). Parts 1 and 2 and related articles are [read more]
There are number of ways in which self managed superannuation funds (SMSFs) can receive non-arm’s length income (NALI). Part 2 of this 3-part series examines some of the oft overlooked NALI provisions, including dividend NALI found in s 295-550(2) and (3), non-fixed trust NALI found in s 295-550(4) and fixed trust entitlement NALI found in [read more]
Background/overview As a lawyer, I do a lot of work advising and representing approved SMSF auditors who the ATO are reviewing/auditing. I also advise and represent auditors who the ATO have referred to ASIC. Accordingly, the recent Sidhu decision very much piqued my interest. This decision involved an approved SMSF auditor (Mr Sidhu) who the [read more]
Recent changes to Queensland trust law allows for trusts to vest up to 125 years after the commencement date of the trust, including a discretionary trust, testamentary trust and unit trust. The extended vesting date should be reflected in new trust deeds while a variation to extend the vesting date of an existing trust deed [read more]
Introduction The ATO is placing increased scrutiny on rental and property related matters as recent ATO data suggests that around 9 out of 10 taxpayers are not meeting the current tax rules. This is interesting as the superannuation rules add greater complexity on the normal tax rules when an SMSF invests in a rental property, [read more]
Non-arm’s length income (NALI) remains a contentious topic for self managed superannuation funds (SMSFs). Part 1 of this 3-part series provides a history and overview of NALI as well as examining NALI under s 295-550(1) (Ordinary NALI) of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997). Types of NALI Broadly, there are different types of [read more]
The ATO says that ‘it has become common within some parts of the superannuation industry for a person to pay an expense on behalf of a superannuation fund.’ In this article, we consider whether that can cause non-arm’s length income (NALI) and/or a contribution. How the situation might arise Consider a situation where a related [read more]
As the end of financial year (EOFY) approaches, trustees and their advisers need to be aware of their trust obligations to ensure ongoing compliance and ensure they do not invoke unnecessary tax liabilities and avoid breaches of trust duties that could result in severe penalties. The ATO has released a checklist designed to assist with [read more]
In April 2025, the Full Court of the Federal Court of Australia (Full Court) handed down the latest decision in respect of the Merchant group. This decision is not directly about SMSFs. However, it nevertheless contains an important lesson for SMSFs. The full decision is available at <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCAFC/2025/56.html> Facts In the 2015 financial year, the [read more]
The ATO can disqualify an individual from having an SMSF. However, the ATO has discretion as to when it exercises this power. Contraventions can occur without disqualification. A recent ART decision sheds light on when disqualification might not occur. The ART decision is Omibiyi and FCT [2025] ARTA 553. The full text is available at [read more]
