A much-anticipated ruling, finalised this week by the ATO, has the potential to trigger billion-dollar tax liabilities that would ultimately be borne by mum and dad members of large superannuation funds.

The Law Companion Ruling 2021/2 concerns the application of so-called non-arm’s length income (NALI) and non-arm’s length expense (NALE) rules and, while it primarily focuses on self-managed superannuation funds, the principles apply equally to Australia’s largest APRA-regulated superannuation funds.