Complicated SMSF investment structures and avoiding the NALI minefield: Key learnings from ATO determinations

Technical Summit 2021

The non-arm’s income rules, or NALI, have been around for decades. Despite that, historically, they have been rarely invoked by the ATO and largely ignored by many advisors and trustees. However, in the last 10 years, NALI has become an increasing focus for both the ATO and the Government. This has culminated in the non-arm’s length expenses (NALE) law and the ATO’s views of those laws as set out in LCR 2019/D3. In this workshop, Phil Broderick will work through:

  • The NALI and NALE rules and their application to property development and unrelated trust arrangements;
  • Case studies which have resulted in an ATO determination of NALI;
  • Key ATO focus areas when considering the application of NALI, and;
  • How to correctly structure an investment arrangement to avoid NALE and NALI.

At the end of the session, you will be able to:

  • Understand the potential application of the NALI and NALE rules to investing in structures and property development arrangements, and;
  • Understand how to structure investment arrangements to avoid the application of NALI and NALE.

The contents of this resource are taken to be correct at the time of publication.

Disclaimer: Technical Papers contain factual information only and are prepared without considering particular objectives, financial circumstances and needs. The information provided is not a substitute for legal, tax and financial product advice. The information contained in this document does not constitute advice given by the SMSF Association to you. If you rely on this information yourself or to provide advice to other persons, then you do so at your own risk. The SMSF Association is not licensed to provide financial product advice, legal advice or taxation advice. We recommend that you seek appropriate professional advice before relying upon the information in this technical paper. While the SMSF Association believes that the information provided is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk. The information provided in this paper is not considered financial advice for the purposes of the Corporations Act 2001. © SMSF Association