Accountants doing the books for their own SMSF has always been a grey area, because it technically creates a risk of non-arm’s length income (NALI) being applied.
As DBA Lawyers director Daniel Butler explained, this concern is triggered by the accountant saving money on accounting costs that would have otherwise been paid for
Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018, which was introduced late last month, gives some awaited clarity. An explanatory memorandum (EM) confirms NALI rules do not apply “in respect of superannuation entity’s arrangements that are purely internal”.
“This is because an entity’s internal functions are not undertaken with another party on any terms, non-arm’s length or otherwise,” the EM states.
The materials also provide an example of an SMSF trustee undertaking bookkeeping activities for no charge in performing their trustee duties.
“Such internal arrangements are outside of the scope of the non-arm’s length income rules as they do not constitute a scheme between parties dealing with one another on a non‑arm’s length basis,” the EM states.
Mr Butler said this clarification in the EM is a “welcome surprise” and clarifies that Treasury does not consider this activity to be an NALI risk.
“It provides some comfort for practitioners who previously considered that too uncertain or uncharted waters,” he said.