Net non-arm's length income worksheet (naf)

SMSF return only

As self-managed funds are required to separately disclose Net non-arm’s length income, Tax has provided a worksheet for the SMSF (naf) to enter income and deductions and any brought forward Non-arm’s length losses from a prior year in the respective classes of income.

There are three types of non-arm's length income:

• Net non-arm’s length private company dividends (U1)

• Net non-arm’s length trust distributions (U2)

• Net other non-arm’s length income (U3)

Losses at the end of the year are quarantined against each class for use in a subsequent year.

If the SMSF has received a distribution of Non-arm’s length income and entered this in the Distributions from trusts worksheet (dft), that amount will be integrated to the naf and from there to label U2. Refer to Distributions from Trusts worksheet (dft).

Grids have been provided for the dissection of income and deductions. Click [Alt+S] at the field to open the grid.

To open the worksheet directly at any of the U1, U2 or U3 labels at Income item 10 click [Alt+S] or the Schedule icon, or click Preparation > Schedule > Net non-arm’s length income worksheet (naf). 

The worksheet also contains a direct link to the Distributions from Trusts worksheet (dft) and relevant entries made in that worksheet will integrate to the naf and from there to the label U2.