The introduction of the non-arm's length expenditure (NALE) rules, and the ATO's interpretation of these rules, as published in the recently finalised Law Companion Ruling LCR 2021/2, will have far reaching and, it is submitted, significant harmful consequences; it is difficult to imagine that such outcomes were intended. These rules apply with effect from 1 July 2018, including with respect to income derived as a result of an arrangement entered into prior to that date.