{"id":1192,"date":"2022-05-03T05:25:06","date_gmt":"2022-05-03T05:25:06","guid":{"rendered":"https:\/\/actinvest.com.au\/?p=1192"},"modified":"2022-05-03T05:25:06","modified_gmt":"2022-05-03T05:25:06","slug":"ato-ruling-may-offer-solution-to-nale-issues","status":"publish","type":"post","link":"https:\/\/actinvest.com.au\/index.php\/ato-ruling-may-offer-solution-to-nale-issues\/","title":{"rendered":"ATO ruling may offer solution to NALE issues"},"content":{"rendered":"<p><strong><em>Amendments being\u00a0made to contribution ruling TR 2010\/1 may provide a fix to some of the significant issues with the non-arm\u2019s length expenditure rules, said the SMSF Association.<\/em><\/strong><\/p>\n<p><img loading=\"lazy\" alt=\"\" height=\"317\" src=\"https:\/\/acctweb.com.au\/images\/fp-nallli.jpg\" width=\"475\" \/><\/p>\n<p>Addressing the 2022 SMSF Association National Conference,\u00a0SMSF Association deputy chief executive Peter Burgess said the changes to the non-arm\u2019s length expenditure (NALE) rules\u00a0would have much broader implications for the entire superannuation sector than was originally intended.<\/p>\n<p>\u201cIn some circumstances, could result in all of the fund\u2019s income being taxed at 45 per cent,\u201d said Mr Burgess.<\/p>\n<p>\u201cPrior to the introduction of the\u00a0NALE\u00a0rules, we were certainly not coming across SMSF members who were undercharging for services provided to their fund as a deliberate strategy to circumvent the contribution caps or to artificially inflate the fund\u2019s investment earnings.\u201d<\/p>\n<p>Mr Burgess said it is imperative that these rules are appropriately targeted and are fit for purpose.<\/p>\n<p>\u201cIn our view, amendments are needed to exempt general expenses from these provisions, and ensure penalties only apply to expenditure shortfall amounts rather than to some or all of the fund\u2019s income,\u201d he explained.<\/p>\n<p>Mr Burgess said it is the linking of the\u00a0NALE\u00a0to some or all of the fund\u2019s income, and then applying penalties to that income, that could give rise to inappropriate and poorly targeted outcomes.<\/p>\n<p>\u201cBreaking this link and only penalising the shortfall amount is, in our view, an appropriately targeted legislative response,\u201d he said.<\/p>\n<p>\u201cThe penalty could be treating the shortfall amount as a taxable contribution or dealing with it through the contributions regime.<\/p>\n<p>\u201cSo, the solution may well lie in the amendments the ATO are currently making to contribution ruling TR 2010\/1, which is now expected to be released in the second half of 2022.\u201d<\/p>\n<p>Mr Burgess noted that the government had announced plans to amend the\u00a0NALE\u00a0rules to ensure they are operated as intended, an announcement that has been welcomed by the SMSF Association.<\/p>\n<p>\u201cWe were pleased to see this announcement and we look forward to a bipartisan approach to addressing this issue and ensuring the rules work as intended\u201d, he said.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>Miranda Brownlee<\/p>\n<p>26 April 2022\u00a0<\/p>\n<p>smsfadviser.com<\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong><em>Amendments being\u00a0made to contribution ruling TR 2010\/1 may provide a fix to some of the significant issues with the non-arm\u2019s length expenditure rules, said the SMSF Association.<\/em><\/strong><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1192"}],"collection":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/comments?post=1192"}],"version-history":[{"count":1,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1192\/revisions"}],"predecessor-version":[{"id":1193,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/1192\/revisions\/1193"}],"wp:attachment":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/media?parent=1192"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/categories?post=1192"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/tags?post=1192"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}