Important information for SMSF Trustees: Understanding NALI and NALE

Non-Arm’s Length Income (NALI) and Non-Arm’s Length Expenses (NALE)

NALI and NALE are critical concepts for Self-Managed Superannuation Funds (SMSFs). They exist to ensure all transactions are conducted on commercial, arm’s-length terms, as required by the Superannuation Industry (Supervision) Act 1993 (SIS Act). Breaching these rules can lead to severe tax penalties and compliance risks.