Hello Clare
Thanks for the question.
It is assumed that the employer that is leasing the computer from the fund, despite being the employer of a fund member (and trustee) is not a related party of the fund member as either a Part 8 associate or as a standard-employer sponsor of a member of the fund.
If this is the case, then the asset should not be an in-house asset. As you make reference to, even if it was an in-house asset, it is clearly worth less than 5% of the fund’s total assets.
Another issue is whether the rental income of $250 per month is considered arm’s length, such that the Non-arm’s length income rules in section 290-550 of the Income Tax Assessment Act 1997 are not triggered. At the time the arrangement started did the trustee provide some kind of documentation as to what a third party would have charged to rent a similar computer?
It could be that the impact on income tax expense is not material – 12 x $250 is $3,000.  $3,000 x 45% = $1,350 (if NALI) compared to $3,000 x 15% = $450 if not NALI (assuming in accumulation phase).
Would be happy to hear the thoughts of other fund auditors on this matter.
Best regards
The Auditors Institute