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Member update: non-arm's length income and expenditure rules

1st June 2022

A wide range of professional and industry associations (refer below) have continued to have ongoing discussions about the non-arm’s length income and expenditure tax provisions applying to all super funds with the Australian Taxation Office and Treasury.  We are very mindful that the ATO’s administrative approach to non-arm’s length expenditure of a general nature as set out in Practical Compliance Guide PCG 2020/5 ceases on 30 June 2022.


The ATO have confirmed they do not consider the general expenditure issue to be a significant risk for either SMSFs or large APRA funds which would warrant a targeted compliance focus.  They recognise the need to urgently provide certainty to funds and are now considering whether an extension to the transitional compliance approach is warranted.  We will also continue to liaise with Treasury about a longer term necessary legislative amendment to these provisions.  We look forward to working with the Government and Treasury about the legislative amendment.


The professional and industry associations are: Chartered Accountants Australia and New Zealand, CPA Australia, the Institute of Public Accountants, The Tax Institute, the SMSF Association, the National Tax and Accountants Association, the Association of Superannuation Funds of Australia, Australian Institute of Superannuation Trustees, the Actuaries Institute, Self-Managed Independent Superannuation Funds Association, the Financial Planning Association of Australia, Tax & Super Australia and the Financial Services Council.

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