Non-arm's length expenses (NALE)
The Treasury Laws Amendment (Support for Small Business and Charities, and Other Measures) Act 2024External Link amends the rules for NALE for superannuation entities.
Under the amendments, from 1 July 2018:
- For APRA-regulated funds with no more than 6 members (small APRA funds), the amount of non-arm's length income (NALI) arising from a NALE that is a general expense (also referred to as 'non-arm's length general expense') will be twice the difference between the expense that the entity did incur (including nil expenditure) and the amount that might have been expected to be incurred. This is the 'Twice the difference approach'.
- For APRA-regulated funds with more than 6 members (large APRA fund), exempt public sector superannuation funds, pooled superannuation trusts (PSTs) and approved deposit funds (ADFs), will be exempt from the NALI rules arising from NALE for both non-arm's length general and specific expenses. However, they will still be subject to the remaining non-arm's length income rules for income derived on a non-arm's length basis.
For all superannuation entities, the NALE rules don't apply to expenditure incurred or expected to have been incurred before 1 July 2018.
Trust income schedule
From the 2024 income year, if your clients are a small APRA fund and they received one or more distributions from trusts, they must complete a Trust income schedule 2024 and attach it to their fund income tax return. The trust income schedule details each distribution that you receive from trusts.
Complete the schedule if your clients report a distribution from a trust at:
- item 10 income, labels
- A Net capital gain
- D1 Gross foreign income
- N Trust distributions unfranked amount
- O Trust distributions franked amount
- P Trust distributions franking credit
- Q Trust distributions other amount
- U Net non-arm's length income (non-arm's length trust distributions only).
For information to help your clients complete the trust income schedule and who must complete the schedule, see Trust income schedule and instructions 2024.
Items removed from the fund income tax return
In the Fund income tax return 2024 label E Eligible rollover fund has been removed at item 8 – Status of fund or trust.