Following passage of the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Act 2024, the Australian Taxation Office (ATO) outlined the changes to the non-arm's length income (NALI) provisions applicable to superannuation funds.
The changes, which became effective July 1, 2024, and apply from July 1, 2018:
- Limit the amount of NALI arising from a non-arm's length general expense for small Australian Prudential Regulation Authority (APRA) regulated funds to twice the difference between the actual expense and the expected market rate of the expense
- Exempt large APRA-regulated funds from the non-arm's length expenditure (NALE) provisions for both general and specific expenses of the fund, and confirm the remaining NALI rules continue to apply
- Exempt the application of the NALE provisions, as amended by the Act, for expenditure that occurred prior to the 2018–2019 income year