For self-managed super fund trustees who offer their fund professional or trade services, reading the latest Australian Taxation Office ruling on non-arm’s length expenditure (NALE) is critical as there are changes to the non-arm’s length income (NALI) rules established in 2019.

Although the ATO’s ruling does provide several examples where trustees provide a service to their fund for no charge without triggering NALE, the underlying policy rationale of these rules is to ensure all SMSF transactions occur on arm’s length terms. For those who transgress, the tax penalties can be significant.