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ATO won’t police NALI general expense rules

Sarah Kendell
15 November 2019 — 1 minute read

The ATO has sought to assure the SMSF sector that it will not devote compliance resources to policing general expenses under recent changes to NALI rules, and is seeking a practical solution for accountants and other professionals that provide services to their own SMSF.

Speaking to SMSF Adviser, ATO assistant commissioner Dana Fleming said the regulator was currently considering options to practically administer the general expense rules contained in the NALI legislation, but it did not consider there were any systemic issues around financial services professionals providing basic services to their own funds for reduced or no costs.

“The consultation finishes on 15 November, so we have got quite a few good submissions around what we might do, and I am looking for a solution about how we can practically deal with that issue,” Ms Fleming said.


“I think what I can assure the industry is that we are not looking to dedicate compliance resources to administering general expenses — I don’t see that as a risk area for the SMSF sector and that was not the reason the legislation was introduced.”

Ms Fleming said the ATO understood the distinction between discretionary and operational expenses within a self-managed fund.

“General expenses by their nature are usually not discretionary; they are things you have to do to run your fund, like get your accounting done, use a platform provider administration fee or get your actuarial certificate,” she said.

“So, what we need to find is a practical administrative solution as to how we can give some comfort to individuals that provide those services, that they are not going to end up in an ATO audit.”

She added that the ATO was open to industry suggestions around a potential solution that was easy to communicate to practitioners while following the intent of the legislation.

“I am hoping the industry might come up with some good ideas through the submission process, which was one of the reasons we decided to go to consultation without a solution necessarily, because sometimes other people can come up with a better idea than you,” Ms Fleming said.

“We will have to work out which is the easiest to implement because that’s probably my number one priority — what is the simplest for people to understand and therefore for us to implement.

“We need to find a way to take the noise out of this for the industry, because it’s not what we’re interested in. We need to let people be focused on the real issues like illegal early release, promoters, lodging your returns on time — the really important stuff.”

ATO won’t police NALI general expense rules
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