The industry has reacted to the Government’s consultation on non-arms length income.
Earlier this week, the Government said it would consult with industry stakeholders on the appropriate operation of the non-arms length income (NALI) and expense provisions following industry feedback.
Tony Negline, CA ANZ superannuation leader, said NALI had been an issue as far back as September 2019.
“Since an Australian Taxation Office (ATO) ruling was first issued on this law as a draft in September 2019, the accounting and finance industry have spent over two years asking the Government for the law to be narrowed to its original intent.
“There are major consequences for minor errors which means that solutions would have had to be worked through very carefully requiring considerable time and expertise.
“The law and ATO ruling has been a dark cloud over the profession’s head who have been waiting with bated breath for the storm.
“This announcement provides an umbrella of hope that there will be more certainty and specific interpretation to these rules for super funds.”
Self-Managed Super Fund (SMSF) Association deputy chief executive and director of policy and education, Peter Burgess, said NALI could have “far-reaching and unjustifiable” consequences for super funds.
“It’s our considered view that the NALI rules go much further than originally intended. For example, there could be situations where all the income received by an SMSF, including taxable contributions and realised capital gains, is taxed at 45% because the SMSF failed to incur a small fund expense on arm’s length terms.
“There could also be situations where all the income an SMSF receives from a particular investment, including any realised capital gains on selling the investment, is forever tainted as NALI because of a simple oversight.”
He added any rules should be applied retrospectively from 1 July, 2018.
BlackRock boss Larry Fink praised Australia’s superannuation system in his annual chairman’s letter.
The prudential regulator has announced it will publish new expenditure data of superannuation funds, providing details on expenses like advice, director remuneration, and payments to unions.
Affirming the UK’s growing attractiveness as an investment destination, a number of Australia’s largest investors recently joined the UK Foreign Secretary for an exclusive briefing in Canberra to discuss further opportunities for trade and growth.
The specialist superannuation law advisory practice is set to wind up, with managing partner Jonathan Steffanoni planning to bring a new offering to market.
Add new comment